l
AGENCIES IN SERBIA
ANALYSIS AND RECOMMENDATIONS FOR
REFORM
March 2013
USAID BUSINESS ENABLING PROJECT
This report is made possible by the support of the American People through the United States Agency for
International Development (USAID). The contents of this report are the sole responsibility of the authors and do
not necessarily reflect the views of USAID or the United States Government.
Submitted by:
Cardno Emerging Markets USA, Ltd.
Balkan Centre for Regulatory Reform
Submitted to:
USAID Serbia
Study prepared by:
Balkan Centre for Regulatory Reform
Authors:
Dragana Aleksić
Branko Radulović
Contract No.:
Disclaimer: The intention of this study was not to analyze public administration reform in the
Republic of Serbia in general, but only specific public sector organizations that could be
categorized as 'agencies', according to the criteria set out in the study.
TABLE OF CONTENTS
EXECUTIVE SUMMARY ............................................................................................................... 5
1. INTRODUCTION, OBJECTIVES AND METHODOLOGY ................................................... 12
1.1. INTRODUCTION ........................................................................................................................ 12
1.2. OBJECTIVES ............................................................................................................................ 15
1.3. SCOPE OF THE STUDY AND DATA COLLECTION ....................................................................... 16
1.4. STRUCTURE OF THE STUDY ..................................................................................................... 17
2. OVERVIEW OF THE SERBIAN SYSTEM OF AGENCIES ................................................. 18
2.1. LEGAL FRAMEWORK FOR ORGANIZATION AND FUNCTIONING OF AGENCIES IN SERBIA ......... 18
2.1.1. HOLDERS OF ORIGINAL PUBLIC POWERS.............................................................................. 19
2.1.2. HOLDERS OF DELEGATED PUBLIC POWERS.......................................................................... 21
2.2. NUMBER OF AGENCIES IN SERBIA........................................................................................... 25
2.3. MISNOMERS - INAPPROPRIATE NAMES OF AGENCIES DO NOT REFLECT THEIR
ORGANIZATIONAL FORMS ............................................................................................................... 26
2.4. POSSIBLE OVERLAP BETWEEN JURISDICTIONS AND FUNCTIONS OF DIFFERENT AGENCIES ... 27
2.5. AGENCIES' AUTONOMY ........................................................................................................... 27
2.5.1. LEGAL AUTONOMY ................................................................................................................ 28
2.5.2. FINANCIAL AUTONOMY ......................................................................................................... 30
2.5.3. MANAGERIAL AND PERSONNEL AUTONOMY.......................................................................... 33
2.5.4. POLICY AUTONOMY .............................................................................................................. 37
2.5.5. DE FACTO AND DE JURE AUTONOMY OF AGENCIES .............................................................. 38
2.6. PERFORMANCE MANAGEMENT ................................................................................................ 40
2.7. CONTROL OF AGENCIES .......................................................................................................... 41
2.8. TRANSPARENCY OF AGENCIES ............................................................................................... 42
2.8.1. TRANSPARENCY IN PRACTICE .............................................................................................. 43
2.9. TERMINATION OF AGENCIES .................................................................................................... 45
3. AGENCIFICATION IN SERBIA .............................................................................................. 46
3.1. AN OVERVIEW OF PUBLIC ADMINISTRATION REFORM IN THE REPUBLIC OF SERBIA ............. 46
3.2. 'MAPPING' ORGANIZATIONAL CHANGES WITHIN THE SERBIAN PUBLIC ADMINISTRATION ....... 47
3.2.1. REORGANIZATION OF AGENCIES AND OTHER PUBLIC BODIES IN SERBIA IN 2012 ................ 48
3.3. CREATION OF AGENCIES ......................................................................................................... 50
3.3.1. THE WAVES OF AGENCIFICATION (PROLIFERATION OF AGENCIES) IN SERBIA ...................... 53
3.4. EXPLAINING AGENCIFICATION IN SERBIA ................................................................................ 54
4. INTERNATIONAL EXPERIENCES WITH AGENCIFICATION AND
DEAGENCIFICATION ................................................................................................................. 57
4.1. DEFINITION OF AGENCY........................................................................................................... 57
4.2. EXECUTIVE AND/OR REGULATORY AGENCIES ......................................................................... 58
4.3. CATEGORIZATION OF AGENCIES ............................................................................................. 58
4.4. AGENCIFICATION - PROLIFERATION OF AGENCIES.................................................................. 60
4.4.1. W AVES OF AGENCIFICATION................................................................................................. 60
4.4.2. OVERVIEW OF AGENCIFICATION ACROSS DIFFERENT GROUP OF COUNTRIES ...................... 61
4.4.3. AGENCIFICATION IN THE CEE COUNTRIES AND ITS DRIVERS ............................................... 62
4.4.4. AGENCIES - EU REQUIREMENTS OR EU RECOMMENDATIONS? ........................................... 65
4.4.5. AGENCIFICATION BY EXECUTIVE TASKS ............................................................................... 72
4.5. DEAGENCIFICATION................................................................................................................. 74
4.5.1. INTERNATIONAL EXPERIENCE WITH THE REORGANIZATION OF AGENCIES............................ 75
5. RECOMMENDATIONS ........................................................................................................... 91
5.1. DEALING WITH THE STOCK - HOW TO RATIONALIZE AND REORGANIZE THE
EXISTING SYSTEM OF AGENCIES .......................................................................................... 91
5.2. DEALING WITH THE FLOW - MECHANISMS FOR PREVENTION OF
ADMINISTRATIVE STRUCTURE FROM FURTHER AGENCY PROLIFERATION .............. 99
5.3. DEALING WITH THE QUALITY OF AGENCIES' PERFORMANCE AND SERVICE
DELIVERY .................................................................................................................................. 101
ANNEXES ................................................................................................................................... 106
ANNEX 1. LIST OF AGENCIES ................................................................................................ 106
ANNEX 2. LIST OF AGENCIES CONTACTED ON THE BASIS OF THE LAW ON FREE
ACCESS TO INFORMATION OF PUBLIC IMPORTANCE .................................................... 111
ANNEX 3. LIST OF AGENCIES BY AREAS ............................................................................ 113
ANNEX 4. SURVEY RESULTS ................................................................................................. 115
ANNEX 5. AGENCIES IN SERBIA THAT HAD FORERUNNERS ......................................... 118
ANNEX 6. REGULATORY BODIES IN CHARGE OF IONIZING PROTECTION AND
NUCLEAR SAFETY IN THE EU COUNTRIES ........................................................................ 119
ANNEX 7. CROATIAN DEAGENCIFICATION - BODIES THAT WERE REORGANIZED .. 120
ANNEX 8. IRELAND DEAGENCIFICATION ........................................................................... 121
ANNEX 9. TESTS/CRITERIA FOR REVIEW PROCESS OF AGENCIES ............................ 124
ANNEX 10. TRANSITION GUIDELINE .................................................................................... 128
ANNEX 11. LIKELY CONSEQUENCES AND COSTS OF REORGANIZATION ................. 129
ANNEX 12. ESTIMATION OF THE COSTS OF NEW BODY ESTABLISHMENT ................ 130
ANNEX 13. CALCULATING DIRECT SAVINGS THAT ARE GOING TO BE MADE ON THE
BASIS OF REORGANIZATION OF EXISTING AGENCIES .................................................. 131
ANNEX 14. CONTACTED PARTIES ........................................................................................ 132
ANNEX 15. ROAD MAP............................................................................................................. 133
REFERENCES ........................................................................................................................... 140
Draft Analysis of agencies in the Republic of Serbia — Page 4
EXECUTIVE SUMMARY
This study originated from the need to ensure better control and greater accountability of
agencies1, to offer recommendations to policy makers on how to provide better services to
citizens at less cost, and to avoid the pitfalls that have undermined previous reform
attempts. Existing system of agencies in Serbia is unclear, inconsistent, costly and
ineffective, thus unsustainable in the long-term, as there is a number of problems related to
their legal status, remits and names, control of agencies. However, so far, the reforms
concerning the system of agencies in Serbia have turned out to be just one-off and rather illconceived reorganization measure, lacking both well-defined criteria and body responsible for
implementation and coordination. The result so far is rather erratic abolition of agencies and
occasional organizational changes. Hence, the study offers clearly defined criteria for reorganization
of the system of agencies in Serbia. It examines possible reform of agencies from the perspective of
the EU accession process and offers relevant policy options to increase accountability and
effectiveness of agencies. In that respect, the study also represents the first attempt to
systematically analyze the process of agencification in Serbia and its consequences.
Agencification or proliferation of agencies2 in Serbia started after the democratic turnover in
2001, with the greatest number of agencies created during the previous government term,
when 38 agencies were established. Some of these agencies were not completely new, but had
legal predecessors that had been carrying out the same or similar tasks before (i.e. they changed
organizational form, name, purview, etc.). Nevertheless, a number of agencies were created to
perform completely new tasks that have not been executed before. Hence, the public often argues
that there are too many agencies working inefficiently and ineffectively, not contributing to the
government's objectives, thus some rationalization in the number and costs of agencies is
necessary.
As mentioned, the current agencies' landscape is inconsistent, cumbersome, costly and
inefficient. A large part of the problems stem from complicated and outdated legislative
framework for delegation of authority i.e. public powers to agencies. Current legal framework
grants extensive authority to agencies. However, once agencies are created and/or delegated tasks
to perform, it is hard to exercise an effective control. In such circumstances, agencies in Serbia use
their discretionary power to employ great number of people and determine high level of salaries. For
example, although the Government introduced some measures to solve the problem of overstaffed
public sector and uneven levels of salaries, there are still no accurate data on the number of
employees in the public sector (including both civil servants and people employed on the
basis of the Labor Law). Moreover, agencies do not report on their performances accurately, or do
not report at all. Finally, there is no definite list of various agencies. To be able to conduct an in-
1
For the purpose of this study, agencies are considered as bodies that fulfil the following two criteria: 1) are
structurally disaggregated from the central government (ministries), which practically means that they have
higher degree of autonomy compared to departments/sectors/units within ministries (they have identifiable,
separate organizational structure, own name, and are given a single or small set of functions, while there is a
legal framework which sets out its purpose, powers, governance and reporting arrangements), and 2) operate
under more business-like conditions than the government bureaucracy.
2
Agencification or proliferation of agencies means an expansion in the number of organizations (through
their establishment, secession and split) that operate at arms’ length of the central government (ministries), to
implement public policies in a relatively autonomous way.
Draft Analysis of agencies in the Republic of Serbia — Page 5
depth analysis, the study compiled an accurate list of agencies identified during the research. Types
of agencies that were identified include:
- Bodies within ministries (31 administrations, inspectorates, directorates and bodies within
ministries with different names),
- Government services and advisory bodies (19 identified),
- Special organizations (17 secretariats, bureaus, and other special organizations with
different names),
- Public agencies (15),
- Independent regulatory bodies (25).
Some of the consequences associated with the agencification in Serbia are the following:
- It is not always clear why some agencies (e.g. public agencies) operate at arm's
length from the Government rather than to have a status of state administration
bodies (i.e. to have lower level of organizational autonomy), or even to be a part of
the ministries (e.g. sector, department, unit);
- There are obvious differences between autonomy of agencies falling into the same
category (e.g. some special organizations are more autonomous as they have legal
personality status compared to other special organizations that do not have it), and
- It is not always clear why several agencies operate in one specific area as it may result
in an overlap between powers and responsibilities of agencies and core ministries, or
between agencies themselves, producing an ineffective usage of budgetary resources.
Furthermore, transparency of agencies is not on the satisfactory level. Out of the total number
agencies that were asked to provide information of public importance on revenues, expenditures
and number of employees, 26,42% have never responded to the request. These agencies violated
the Law on Free Access to Information of Public Importance, while the majority of agencies that
provided the data violated that law in terms of the deadlines for sending out information of public
importance, and/or because they provide just partial information.
The study compares Serbia with the group of Central and Eastern European (hereinafter:
CEE) countries because of the similarities in terms of political history and tradition, and legal
and administrative systems. The conclusion of this study is that similar underlying drivers led
to excessive creation of agencies in Serbia and CEE countries, including:
a) Policy transfer that happened due to a 'fashion' of agencification pursued in other countries,
but also due to a large number of international experts advising the governments to establish
separate agencies that would be responsible for implementation of policies created by policy
makers, and proposing models used in their own countries;
b) Influence of EU accession and necessary harmonization of national legislation with the
Acquis Communautaire (hereinafter: Acquis), on the basis of the consensus about the
priority of EU membership among political parties motivated to join the EU, which did not
leave much room for questioning the appropriateness of particular policy recommendations
by the European Commission and decisions of the governments regarding establishing
agencies;
c) Benefits that politicians materialize through excessive employment of political associates in
agencies;
d) Pressures by international donors;
e) Historical circumstances and tradition that has resulted in the continuity of persistence of
agencies established during communism and their then organizational forms;
Draft Analysis of agencies in the Republic of Serbia — Page 6
f) Need for capacity building that was mixed up with increased creation of agencies, and
g) Possibility to raise the tax burden through agencies' operations.
In addition, common patterns and trends in both CEE countries and Serbia encompass:
 Agencification was not a premeditated part of the public administration policy agenda and
the result of methodical design, but rather the outcome of improvisations, traditions and
political factors. Most common approach was to establish new bodies outside ministries
and in addition to the existing administrative structure, rather than to reorganize and adapt
the existing ones;
 Ad hoc and sectoral development of agencies is obvious;
 Agencies enjoy high degree of formal autonomy from the executive government (more
structurally disaggregated agencies tend to have higher formal autonomy from the core
government);
 A domination of ex ante (inputs oriented) control over ex post (results oriented)
control of agencies is notable;
 Little has been done regarding the introduction of public sector performance
indicators.
Key difference between CEE countries and Serbia is that the semi-autonomous agencies
(organizations/units/bodies within the government and state administration performing public tasks
at the central level, with no legal independence but some managerial autonomy) are the preferred
form in CEE countries for the executive tasks, while in Serbia 'regular' type of agencies
(legally independent organizations/bodies, with managerial autonomy) are the most popular
form of agencies. Namely, 'regular' type of agencies were more popular than semi-autonomous
organizations without legal independence until the 2000s in transition countries, but since then
number of semi-autonomous agencies has increased much stronger than the number of statutory
agencies. Nowadays, governments across CEE countries prefer agencies with fewer degrees
of autonomy and try to keep executive agencies closer to the government than before. This
can in part be explained by the advent of the second generation reforms known as
deagencification or whole-of-government3 in which governments are looking for ways to
regain some of the control and coordination they lost due to extensive agencification. In
Serbia, however, this trend could not be recognized yet, thus, it could be a benchmark for
future reforms of agencies.
One of the key reasons for proliferation of agencies in Serbia and their resistance to any
Governmental reorganization attempt is distorted Serbian policy makers' perception of EU
recommendations on institutional capacities for implementation of the Acquis. Namely, EU
recommendations towards strengthening the role and/or capacities of institutional structure
to implement the Acquis are very often interpreted as requests for creation of separate
agencies that
 are structurally disaggregated from ministries, and
 have high level of autonomy (because of the political reasons, self-centered interests
of bureaucrats and politicians, and/or severe misunderstanding of EU politics).
3
Deagencification means a contraction in the number of agencies through their abolition, absorption or
merger, or even reorganization of existing agencies such as agency replacement, transfer of agency functions
and change of agency name or any other reorganization aimed at decrease in agencies' autonomy.
Draft Analysis of agencies in the Republic of Serbia — Page 7
Given this, the study deconstructs two key myths that exist in Serbia and are made by policy
makers (politicians and/or bureaucrats):
 Excessive creation of agencies (that are structurally disaggregated from the central
government) is justified on the grounds of the specific EU 'requirements', and
 Once the agency is established, it is not possible to abolish that agency because of
the pressure from the EU to safeguard its organizational autonomy.
The findings of this study suggest that there are no convincing arguments for the two
abovementioned myths. On the one hand, there are no explicit formal requirements from the EU
regarding organizational and/or legal form that bodies performing necessary tasks should
take. Rather, the EU requires only specific tasks to be performed, while it is entirely for each
member/acceding/candidate state to decide which administrative/institutional structure it will use, as
long as the effects of implementing the Acquis requirements are achieved. This means that
institutional/administrative structure implementing specific task might be either centralized or
decentralized. Exemptions are related to several specific areas, where regulation of tasks of public
importance such as networking industries is necessary (e.g. energy, telecommunications and postal
services, competition protection, standardization and accreditation, financial control). For these
areas the EU recommends or requires operational and/or functional independence of regulators
from the legislative, executive and judicial bodies, and in practice, there are standards of
establishing regulatory authorities across the EU countries. On the other hand, it is feasible both
to reduce total number of agencies and reorganize the current agencies landscape (at least,
through reducing their legal and organizational autonomy). Still, experience in Serbia has
clearly shown that there are other reasons why policy makers do not abolish unnecessary agencies.
The reasons do not have much to do with the EU requirements, rather with a lack of political will,
absence of objective policy analysis, monitoring and evaluation, as well as with ill-implemented
public policies, resistance of bureaucracy to changes or plain political or economic rents.
The study also explores whether past rationalizations of agencies in other countries are applicable
to Serbia. Recent experience from several EU countries that conducted comprehensive
reform of their agencies and other public bodies (Croatia, Lithuania, UK and Ireland), may be
instructive for Serbia in many ways. Firstly, Croatian experience as an acceding country may
teach Serbian policy makers that it is possible to rationalize and reorganize public sector
organizations' landscape before joining the EU. Secondly, Lithuanian experience points to the
importance of constant reviewing of agencies' landscape. This country is one of the few in Europe
that have a continuity concerning deagencification process, trying to optimize the structure of public
administration, and reduce the number of agencies, other public sector organizations and civil
servants. Thirdly, the UK experience shows that crowded public sector organizations' landscape
makes confusion when establishing proper relationship and lines of responsibility between parent
ministries and arm's length bodies such as agencies. Also, some of the tests/criteria applied during
the reorganization and abolition of public bodies in the UK might be used as the criteria for
reorganization of agencies in Serbia. Thus, for the purpose of this study, they are clearly defined,
and adjusted to Serbian political, administrative and economic circumstances. Finally, many design
features of Ireland's reform of agencies may be fed into the reorganization of agencies in Serbia,
such as abolition of agency boards, introduction of performance management, extensive sharing of
corporate or back-office administrative functions between agencies, and 'sunset clauses' into the
legislation prescribing creation of new agencies.
Draft Analysis of agencies in the Republic of Serbia — Page 8
As already stated, one-off measures that the Serbian Government has already taken, will neither
resolve practical problems nor neutralize negative consequences of the ad hoc setup and overagencification. Rather, the aim of the Government should be to develop a strategic view on the
structural and functional setup of agencies, lessening the organizational diversity and
fragmentation, and increasing the transparency of the institutional setup and regulatory
framework for founding and operating of agencies. To achieve this goal, the government should
1) Initiate comprehensive reorganization of agencies i.e. dealing with the stock of agencies;
2) Establish mechanisms to prevent further agency proliferation i.e. dealing with the flow
of agencies, and
3) Develop a 'whole-of-government', coordination, control and steering mechanisms that
would strengthen the external accountability of agencies, and ensure the internal
management improvements and quality of public service.
The study provides recommendations centered on these three areas. Dealing with the stock
encompasses a wide range of specific actions towards rationalization and reorganization of existing
system of agencies:
- Setting up a temporary governmental body (specialist management reform unit SMRU) that would be accountable for and in charge of conducting one-off
reorganization and rationalization of existing agencies, according to the criteria set out
in this study;
- Improvement of existing legal framework that regulates holders of delegated public
powers, which is outdated and has inherent deficiencies;
- Abolition of the legal independence of bodies within ministries and changing
organizational form of specific special organizations into the bodies within ministries
according to the criteria set out in this study, to ensure increased accountability of these
agencies, enable public spending control and achieve some public savings;
- Establishment of better scrutiny over special organizations as current legal provisions
are neither clear nor enough to provide for it;
- Prevention of the Serbian public administration system from excessive creation of
public agencies by ensuring that future public agencies may be established just by law
(rather than by regulations such as Governmental decrees);
- Changing organizational form of some public agencies into the special organizations
to ensure increased accountability and public savings;
- Reforming of agencies' names to ensure that names reflect factual organizational forms of
agencies, as the existing names of agencies and their organizational forms do not
correspond in many cases;
- Careful examination of the tasks that could be transferred to public bodies such as
funds and foundations, associations, chambers, alliances, and other 'holders of delegated
public powers';
- Publishing lists of all public bodies that are under auspices of relevant ministries (on
the ministries' websites) to increase the transparency and visibility of public bodies;
- Abolition of agencies that are founded, but are not operational in practice.
Dealing with the flow of agencies includes the introduction of:
- The control mechanism when initiatives for establishment of new agencies appear. So
far, the transparency of creation of agencies has been undermined, as they have often been
established without appropriate arguments, rational explanation by policy makers, and costeffectiveness and impact analysis. The control mechanism could be conceived in such a
Draft Analysis of agencies in the Republic of Serbia — Page 9
-
way that policy makers intending to set up a new agency have to follow clearly
defined criteria when proposing establishment of a new agency and obtain necessary
approvals and opinions from relevant state administration authorities (approval from
the Ministry of Finance and Economy on impact assessment on the Budget of the Republic
of Serbia, opinion of the General Secretariat of the Government on the necessity for
establishing new body that is independent of the ministries, and opinion of the Governmental
Office for Regulatory Reform and Regulatory Impact Assessment on impact assessment on
businesses and citizens);
Regular reviews of agencies on every two to three years, ensuring that agencies still
serve a useful purpose and deliver against their responsibilities, and
The institution of 'sunset clauses', especially for temporary and ad hoc bodies, that would
ensure that the previous pattern of agencies outliving the purpose for which they were
established will not be repeated.
Finally, it is of crucial importance to increase the quality of agencies' performance and service
delivery. In order to achieve that, the following actions need to be carried out:
- Performance management indicators and effective reporting on achievements and
performances have to be introduced in agencies as it is high time for Serbian agencies to
take responsibility for their results through measuring their efficiency and effectiveness in a
clear and transparent way;
- Financial control of agencies has to be strengthen, through better control by relevant
state authorities such as State Audit Institution and Fiscal Council;
- Management boards of public agencies should be abolished given an urgent need to
provide clearer lines of responsibility between agencies and relevant ministries;
- Employment conditions and salaries in agencies need to be reformed, through
introduction of the system of salary grade levels which would deal with the issue of the
level of salaries for similar positions in different agencies;
- Thorough inspection of the engagement on the basis of the Labor Law (e.g. contracts
on temporary and periodical work, special services contracts, etc.) in agencies such
as bodies within ministries, special organizations and Governmental services where
people should be permanently employed having civil servants status instead to be
engaged on the basis of the Labor Law for a longer period than it is allowed in the
Labor Law, full implementation of the Labor Law, and strengthening the role of the
State Audit Institution and efficiency of internal audit;
- Relevant legislation (i.e. the Law on Public Administration, the Law on Civil Servants and
Appointees, and the Law on Public Agencies) should be improved by prescribing stricter
and narrower requirements on experience in particular field that potential managers in
agencies need to have, in order to reduce the risk of negative selection in the public sector;
- Extensive sharing of back-office functions (such as public procurements, catering,
renting and cleaning, accounting, using vehicles, IT and IT equipment maintenance,)
has to be enabled to a greater extent, and
- Postgraduate course on public administration/public policy needs to be incorporated
into the university curriculum as soon as possible to facilitate formal education of future
civil servants and people willing to work in the state administration, equipping them with
necessary knowledge and skills to deal with reorganization of agencies.
Draft Analysis of agencies in the Republic of Serbia — Page 10
To implement these tasks and systematically reform the system of agencies in Serbia, the study
offers a road map with the specific actions that need to be done, and actors that should carry
them out. Majority of the actions may be implemented in the short term.
Draft Analysis of agencies in the Republic of Serbia — Page 11
AGENCIES IN SERBIA
ANALYSIS AND RECOMMENDATIONS FOR REFORM
1. INTRODUCTION, OBJECTIVES AND METHODOLOGY
1.1. Introduction
In the number of developed and transitional countries, governments have pursued reform of
public sector organizations through the so-called 'agencification'. The term agencification
refers to the creation of organizations that operate at arms’ length of the government, to carry
out specific public tasks (e.g. public policy implementation, regulation, service delivery, etc.) in a
relatively autonomous way.4 Agencification was initially conceived as an attempt to increase
efficiency of the public sector through detachment of public policy implementation from public
policy making. However, for many reasons, this caused proliferation of agencies that led to the
second generation of public sector reforms called 'deagencification'. Deagencification
represents a response to negative consequences of agencification and is focused on
reorganization of existing agencies (including mergers, acquisitions, replacements or abolitions
of agencies), and decreasing level of their autonomy.5
The Republic of Serbia has not been immune to the idea of agencification. Agencification was,
among other things, seen as a way to increase efficiency of the unresponsive, cumbersome and
expensive state administration. However, as in many other countries across Europe, this public
sector reform initiative resulted in a number of agencies that are inefficient, ineffective and
do not contribute positively to the Government's objectives.
Since the political turnover in 2000, successive coalition-based governments ruled the country
with different public administration reform programs. There have been regular
announcements that reorganization of agencies is necessary. From 2009 onwards these
announcements have become rather frequent. Similarly, political rhetoric during and shortly after
the last year's general elections was suggesting that the new government would put agencies
and their rationalization high on the political agenda.
However, each initiative towards reduction of the number of agencies in Serbia, ended up
with rather meager and disappointing results. Not many mergers, acquisitions, replacements
or 'deaths' of agencies have happened, while overall number of agencies has increased. This
was partly because of the resistance of the bureaucratic apparatus to any kind of change, and
partly because of the political process that has stymied attempts at the reduction of the number
4
See e.g. Christensen, T. and Laegreid, P. (2006); Laegreid, P. and Verhoest, K. (2010); Pollitt, C. et al.
(2004); Van Thiel, S. et al. (2011a); Van Thiel, S. et al. (2011b); Van Thiel, S. and CRIPO team (2009);
Verhoest, K. et al. (2010); Christensen, T. and Laegreid, P. (2006);
5
See e.g. Van Thiel, S. et al. (2011b); Randma-Liiv, T. et al. (2011); Nakrošis, V. and Martinaitis, Ž.
(2010); MacDCarthaigh, M. (2010).
Draft Analysis of agencies in the Republic of Serbia — Page 12
of agencies, often shifting attention from the content of reforms to the interests of politicians and
bureaucracy.
Box 1. The study uses the following terms in the following way:
- State administration bodies (state administration authorities) - includes ministries, bodies within
ministries (administrations, directorates, inspectorates), and special organizations (secretariats and
bureaus), that are also collectively referred to as 'holders of original public powers';
- Agencies - describes all bodies that fulfill the two following criteria:
1) are structurally disaggregated from the central Government (ministries), which practically means
that they have higher degree of autonomy compared to departments/sectors/units within ministries
(they have separate organizational structure, own name, and are given a single or small set of
functions, while there is a legal framework which sets out their purpose, powers, governance and
reporting arrangements), and 2) operate under more business-like conditions than the government
bureaucracy, and includes:
- Public agencies, independent regulatory bodies, as well as Governmental services and all
state administration bodies except ministries, i.e. bodies within ministries (administrations,
directorates, inspectorates) and special organizations (secretariats and bureaus);
The criteria used for determining which bodies are agencies in this study are used in the vast majority
of countries. However, the characteristics that are used in some other countries to define the term
'agencies', such as legal form, public budgeting or civil servant status of employees are not applicable
for the purpose of defining agencies in Serbia, primarily because of the diversity of solutions. Namely,
some agencies have status of legal personality while others not, some agencies use budgetary
resources while others not, and employees in some agencies have civil servant status, while status of
employees in other agencies is regulated by labor contracts and labor legislation.
- Other public bodies - refers to the other public sector organizations that are separate from the
central Government and are delegated public powers to perform, including:
- Public institutions, funds and foundations, organizations for mandatory social contribution,
chambers, alliances, associations, public enterprises, and similar bodies.
In Serbia, as in other countries, there are a number of issues and concerns about the
establishment, operation, accountability and performance of agencies. Such concerns normally
focus on the combination of four complaints:
- the cost and perceived 'wasteful' spending by these bodies;
- a sense that they are unaccountable for decisions they take;
- the regulatory and bureaucratic constraints that they impose on the rest of the
society, and
- a perception that transparency of these bodies is not on a satisfactory level.
Because of this, the Government of Serbia is often held responsible by the media and the public
for activities of agencies, even though the current accountability arrangements are rather
complex. On the one hand, it is the Government's responsibility to ensure clear lines of
responsibility between agencies and oversight bodies, efficient and effective system of agencies
and delegating public powers. On the other hand, the Government has a limited ability to control
agencies. Namely, current legislative framework allows agencies relatively high level of de jure
autonomy, whereas at the same time agencies use their discretion to increase factual autonomy
in practice.
Draft Analysis of agencies in the Republic of Serbia — Page 13
Nevertheless, similar circumstances i.e. negative consequences of agencification led several EU
countries to pursue reorganization and rationalization of agencies at the national level.
Reorganization of agencies is important for several reasons. Firstly, it ensures better
coordination and communication between state administration and agencies. Secondly, it is
necessary when the size of the government increases ‘exponentially’ relative to the rest of the
society and economy. Thirdly, constantly changing environment, ongoing financial and
economic crisis and severe budgetary constraints, force public administration to adjust to ensure
the improvement of public service delivery, increase operating efficiency and provides value for
money to the citizens. Finally, reorganization of agencies could have a positive impact on the
overall business environment, since it is closely related to simplification of administrative
procedures, fiscal and parafiscal burden, etc. Same reasons imply the necessity to conduct
reorganization and rationalization of agencies in Serbia.
Reorganization and rationalization of agencies would ensure continued relevance of agencies
and their accountability to the Government and citizens. Also, it would ensure that agencies
contribute positively to the Government's objectives in an efficient and effective manner, through
providing services of higher quality and lesser costs to businesses and citizens, along with the
reduction of pressure to the Government of Serbia to generate savings mainly through increase
in taxes. Moreover, cutting the 'red tape' through reduction of the number of agencies that
impose unnecessary administrative burdens and costs to businesses and citizens, would yield
considerable savings and increase overall transparency of operations of agencies. Also, the
Government should implement simplified system of agencies in order to ensure clearer lines of
responsibility between agencies and supervisory bodies. But, in order to be able to deal with the
problems relating to agencies, the Government needs an objective analysis of what functions
are a minimum that the Government has to perform itself, and what tasks agencies are needed
and eligible to perform.
Box 2. Options for reorganization of agencies encompass:
- Mergers - several agencies might be proposed to make a new body, whereas combining
agencies cease to exist;
- Absorptions - an agency might be absorbed by another existing body and/or returned to the
line ministry, whereas functions are entrusted to line ministries or another agency with similar jurisdictions;
- Replacements - an agency might be replaced by a new body (because of the need for changing
legal status, organizational form, name, structure or function, expanding or/shrinking the scope of policy
domain), and/or
- Abolitions - existing agency ceases to exist, whereas efficient policy options are necessary to
provide for transferring rights and obligations, assets and employees from the agencies being abolished.
Some of the consequences that could be expected if the reform would not be implemented
include:
- Further violation of the principle of public finance efficiency and transparency;
- Enabling even greater quasi-fiscal and administrative burdens on businesses, other
organizations and citizens;
- Growing incentives for establishing new agencies that are in a position to provide
sufficient resources to finance desired expenditures and employ as much as possible of
political associates;
- Further politicization of agencies, etc.
Draft Analysis of agencies in the Republic of Serbia — Page 14
1.2. Objectives
Main objectives of this study are to:
- Identify agencies currently operating in Serbia (such as bodies within ministries, special
organizations, public agencies, Governmental services, and independent regulatory bodies
(collectively, ‘the agencies’), classify them according to the specific criteria (e.g.
organizational form);6
- Identify and elaborate problems (e.g. legislative, operational) that the Government of
Serbia should deal with in order to create efficient and effective agencies' landscape;
- Make an overview of recent trends in the reorganization and functions/tasks/services
of agencies in the EU countries, carrying out a comparative analysis of the EU
requirements and/or recommendations for establishment of new agencies at the
national level in member states and countries that are on the road to EU membership;
- Set criteria and offer recommendations for reorganization of agencies to the
Government of Serbia, and in particular to the Ministry of Finance and Economy,
based on the study findings and best practices on how to increase operating efficiency and
effectiveness of the public sector through reorganization of agencies, and how that reform
should be carried out with minimal negative consequences for the Budget of the Republic of
Serbia and state administration landscape itself.
In addition, this study tries to deconstruct two myths related to the agencification and
deagencification processes in Serbia. With respect to the creation of agencies in Serbia, the
first myth is that creation of agencies that are structurally disaggregated from the central
Government represents the EU requirement. However, the EU only requires specific tasks to
be performed, while it is entirely for each member/acceding/candidate state to decide which
administrative/institutional structure it will use, as long as the effects of implementing the Acquis
Communautaire
(hereinafter:
Acquis)
requirements
are
achieved.
Hence,
institutional/administrative structure implementing specific task might be either centralized or
decentralized, which is left to the specific country to decide. Terms used in the directives are
mainly that member/acceding/candidate states should 'designate', 'identify', 'appoint' the
competent authority (appropriate institution) responsible for conducting the tasks required.
Exemptions are related to several specific areas, mainly to regulation of tasks of public
importance such as networking industries (e.g. energy, telecommunications and postal services,
competition protection, standardization and accreditation, financial control). In the case of these
areas, the EU recommends or requires operational and functional independence of regulators
from the legislative, executive and judicial powers. Finally, when the term 'independence' is used
6
To achieve these goals, the study tried to find answers to a number of questions: Why some agencies
(e.g. public agencies) operate at arm's length from the Government rather than to be a part of the central
Government (i.e. to have lower level of organizational autonomy), or even to be a part of the ministries
(e.g. sector, department, unit)? Are there differences between autonomy of agencies falling into the same
category (particularly given their legal and financial autonomy, and/or status of their management and/or
employees and level of salaries, which is at the same time, different and somehow preferred compared to
the status of civil servants within the central state administration bodies and their salaries)? How
widespread is an overlap between powers and remits of agencies and core ministries, or between
agencies themselves, producing an ineffective usage of budgetary resources?
Draft Analysis of agencies in the Republic of Serbia — Page 15
in the instructive official EU documents (such as EU directives), it primarily means that
competent authority is required to be legally separate from and operationally independent of
such stakeholders working in the specific area as lobbying groups, service providers, operators,
etc.
The second myth is related to the termination of agencies in Serbia. Namely, there is a myth
that it is hardly feasible to reduce the number of agencies before accessing the EU, as
the EU does exert pressure on the Government to safeguard agencies' organizational
autonomy, thus, reorganization and rationalization of agencies is not possible. However, this is
also does not appear so. It is possible to reorganize agencies and reduce their total number,
making considerable public finance savings.
The study represents a laborious task, particularly with respect to identifying all agencies at the
national level. Additional challenge represents the fact that not all necessary data are publicly
available (i.e. data on some agencies, especially some Governmental services and bodies
within ministries, is almost impossible to find out).
However, this study is a good starting point for more specific studies on agencies and other
public bodies in Serbia and possible an in-depth analysis that would assess which specific
agencies could be merged, replaced, absorbed by the parent ministries and other bodies, and/or
abolished. In order to facilitate future studies on agencies and reforms, this study offers the
criteria for reorganization and rationalization of agencies, and the road map that could ensure
achieving the most appropriate and efficient structure of agencies.
1.3. Scope of the study and data collection
Agencies that were subject to the analysis include (Annex 1.):
- State administration bodies (organi državne uprave) such as: bodies within
ministries (tela u sastavu ministarstava) that include administrations (uprave),
directorates (direktorati), inspections (inspekcije) and bodies within ministries with
different names, and special organizations (posebne organizacije) that include
secretariats (sekretarijati), bureaus (zavodi) and special organizations with
different names;
- Public agencies and organizations that are governed by the regulation on public
agencies, collectively referred to as public agencies (javne agencije);
- Independent regulatory bodies (nezavisna regulatorna tela);
- Governmental services (Vladine službe).
The study used previous research and data collected, 7 but the additional source of information
were data collected for this particular study. Namely, a request for providing information of public
importance was sent to the sample of 67 agencies (Annex 2.), exercising the right guaranteed
by the Law on Free Access to Information of Public Importance ('Official Gazette of RS', No.
7
For example, unofficial list of identified public bodies prepared by the Office for Regulatory Reform and
Regulatory Impact Assessment, a list of para-fiscal charges that agencies in Serbia have levied on
businesses and citizens made by the National Alliance for Local Economic Development, etc.
Draft Analysis of agencies in the Republic of Serbia — Page 16
120/04, 54/07, 104/09, 36/10)8. All agencies were asked by email to provide data on the types of
revenues and expenditures they have, and how many employees employed on the basis of the
Law on Civil Servants and Appointees and/or employed or engaged under the Labor Law.
Besides obtaining relevant and most recent data, one of the goals of this questionnaire was to
enable assessment of the transparency of analyzed agencies. Upon reception of the data from
the agencies, the level of responsiveness and information received were evaluated.
Data collection was followed by a legal analysis of regulations and documents. Careful
examination of laws and bylaws has served as a key source of information on classification of
types of agencies and their features. We paid special attention to the Law on Public
Administration, Law on Public Agencies, Law on Public Services, Law on Ministries, Law on Civil
Servants, Law on Maximum Number of Employees in the Administration of the Republic of
Serbia, Law on Salaries of Civil Servants and Appointees, Law on Establishing Maximum Level
of Salaries in the Public Sector, Budget System Law, and Decree on Governmental Services.
Finally, several interviews were held with people from the Serbian European Integration Office,
researchers involved in the analyzing the agencification process in the Balkans, and relevant
civil servants.
1.4. Structure of the study
Chapter 2 provides an analysis of the current landscape of agencies in Serbia and identifies
problems related to the crowded structure of agencies. Chapter 3 identifies different events in
'lifes' and 'deaths' of agencies and illustrates key incentives for trends leading towards both - the
'agencification' and 'deagencification' processes in Serbia. Chapter 4 presents international
trends concerning agencification and deagencification processes and provides relevant case
studies of agencies' reorganization in Croatia, Lithuania, United Kingdom, and Ireland. Chapter
5 offers a range of recommendations on how to improve current landscape of agencies in
Serbia. Finally, chapter 6 contains a number of annexes including various data, criteria that
could be used for rationalization and reorganization of agencies, as well as the road map that
should enable creation of effective and efficient structure of agencies in Serbia.
8
Requests were not sent to the ministries, cabinets of deputies of Prime Minister, National Bank of
Serbia, and National Parliament. Also, requests were not sent to some of the agencies, since it was not
possible to determine their exact contact details.
Draft Analysis of agencies in the Republic of Serbia — Page 17
2. OVERVIEW OF THE SERBIAN SYSTEM OF AGENCIES
In this chapter we briefly present legal framework and describe types of agencies existing in
Serbia. We also examine correlation between names and organizational forms of agencies, as
well as issues related to their autonomy, transparency and control over agencies.
2.1. Legal framework for organization and functioning of agencies in Serbia
Public administration as a part of the executive branch of power performs administrative tasks
within the framework of the rights and obligation of the Republic of Serbia. According to the
article 136 of the Constitution of the Republic of Serbia ('Official Gazette RS', no. 98/2006), it is
independent, bound by the Constitution and law, and accountable to the Government. Some
agencies are directly accountable to the National Parliament.
Box 3. Legal Framework (laws and bylaws) that regulates organization and functioning of
agencies in the Republic of Serbia:
-
Constitution of the Republic of Serbia ('Official Gazette RS', no. 98/2006)
Law on the Government ('Official Gazette RS', no. 55/05, 71/05, 101/07, 65/08, 16/11, 68/12,
72/12)
Law on Ministries ('Official Gazette RS', no. 72/12)
Law on Public Administration ('Official Gazette RS', no. 79/05, 101/07, 95/10)
Law on Public Agencies ('Official Gazette RS', no. 18/05, 81/05)
Law on Public Services ('Official Gazette RS', no. 42/91, 71/94, 79/2005, 81/05, 83/05)
Law on Civil Servants ('Official Gazette RS', no. 79/05, 81/05, 83/05, 64/07, 67/07, 116/08,
104/09)
Law on Maximum Number of Employees in the Administration of the Republic of Serbia ('Official
Gazette RS', no. 104/09)
Law on Salaries of Civil Servants and Appointees ('Official Gazette RS', no. 62/06, 63/06,
115/06, 101/07, 99/10)
Law on Establishing Maximum Level of Salaries in the Public Sector ('Official Gazette RS', no.
93/12)
Budget System Law ('Official Gazette RS', no. 54/09, 73/10, 101/10, 101/11, 93/12)
Law on State Audit Institution ('Official Gazette RS', no. 101/2005, 54/2007, 36/2010)
Law on Ombudsman ('Official Gazette RS', no. 79/05, 54/07)
Law on Information of Public Importance and Personal Data Protection ('Official Gazette RS',
no. 120/04, 54/07, 104/09, 36/10)
Law on Electronic Document ('Official Gazette RS', no. 51/09)
Law on Electronic Signature ('Official Gazette RS', no. 135/04)
Law on Public Procurement ('Official Gazette RS', no. 116/08)
Labor Law ('Official Gazette RS', no. 24/05, 61/05, 54/09)
Decree on Government Services ('Official Gazette RS', no. 75/05, 48/10)
The Rules of Procedure of the Government of the Republic of Serbia ('Official Gazette RS', no.
61/06, 69/08, 88/09, 33/10, 69/10, 20/11, 37/11)
Decree on Internal Organizational Structure and Classification of Work Posts in the Ministries,
Special Organizations and Government Services ('Official Gazette RS', no. 81/07, 69/08,
98/12).
Draft Analysis of agencies in the Republic of Serbia — Page 18
Pursuant to the Law on Public Administration (articles 7-11, 'Official Gazette RS', no. 79/05,
101/07, 95/10), public authorities follow the principles of: independence and legality,
professionalism, impartiality and political neutrality, effectiveness in protecting the clients’ rights,
proportionality and respect for clients, and transparency. The public administration tasks include
the participation in shaping Government policy (by preparing laws, other regulations and general
acts for the Government and proposing development strategies and other measures);
monitoring and assessment of the state of affairs in the areas falling within the competence of
specific authorities; execution of laws, other regulations and general acts; inspection
surveillance, ensuring the legality of the work of public services; development tasks (promotion
and streamlining development in the areas falling within the competences of specific authorities,
in accordance with the Government’s policy); and other expert and professional tasks such as
data collection and studying, analyses, providing information, etc.
Public administration tasks may be performed by holders of original public powers, or by
holders of delegated public powers.
2.1.1. Holders of original public powers
Holders of original public powers (nosioci izvornih javnih ovlašćenja) are, according to the
Law on Public Administration, the Government and state administration bodies. The
Government exercises public powers on the basis of the Law on the Government ('Official
Gazette RS', no. 55/05, 71/05, 101/07, 65/08, 16/11, 68/12, 72/12).
State administration bodies (pursuant to the Law on Public Administration (articles 1, 29 and
34)) include:
 Ministries - perform public administration tasks on the basis of the Law on Ministries
('Official Gazette RS', no. 72/12). They consist of sectors, divisions, departments and
groups;
 Bodies within ministries: administrations, inspectorates and directorates - perform
public administration tasks on the basis of the Law on Ministries and Law on Public
Administration. Bodies within ministries conduct executive tasks such as
inspection and related professional tasks whereas nature or scale of tasks entails
greater autonomy compared to sectors within the ministries, and
 Special organizations: secretariats and bureaus, while special organizations with
different names may be also established - perform public administration tasks on the
basis of the Law on Ministries and Law on Public Administration. Special organizations
perform professional and related executive tasks which nature entails specific
knowledge and professional skills, as well as greater autonomy compared to the
autonomy of bodies within ministries. Their functions are not related to the activities
of the ministries; they are rather referent organizations carrying out some specific tasks.
This study considers bodies within ministries and special organizations as agencies, and
explores them in detail.
Draft Analysis of agencies in the Republic of Serbia — Page 19
Figure 1. State administration bodies according to the Law on Public Administration
While mission of ministries is to make public policy, general mission of special organizations and
bodies within ministries is to implement public policy. However, they may shape Governmental
policies to some certain extent as well. Special organizations differ from bodies within ministries
in the three following aspects:
- They have greater autonomy,
- They may prepare bylaws unlike bodies within ministries shaping the Government's
policies in that way, and
- Their tasks entail necessary specific knowledge and skills to be performed.
According to the international typology of agencies presented in the Section 4.3., and given their
characteristics, it could be said that special organizations and bodies within ministries could be
categorized as so called semi-autonomous agencies. Across the EU, these agencies are
normally part of the state administration system, and have no legal independence but
some managerial autonomy. However, in Serbia, pursuant to the Law on Public
Administration (articles 28 and 34), it is possible for bodies within ministries and special
organizations to become legal entities, hence, many of these agencies in Serbia have
legal status in practice. These inconsistency and lack of uniformity concerning this type
of agencies in Serbia compared to semi-autonomous agencies in Europe, differ Serbia
from other EU countries, and make the control of these bodies by the Government
extremely difficult.
Whenever new government is created in Serbia, a new law regulating ministries is adopted,
prescribing establishment of new ministries. The Law on Ministries regulates also some of the
existing bodies within ministries and special organizations, as well as their responsibilities.
However, special organizations may be additionally established and their remits regulated by
special laws, in accordance with the article 34 of the Law on Public Administration.9 The
opportunity to establish special organizations by special laws has been widely used by
9
The fact that some special organizations are established by special laws, while others are regulated by
the Law on Ministries, made particularly difficult identification of all existing bodies that have a status of
special organizations during this research.
Draft Analysis of agencies in the Republic of Serbia — Page 20
policy makers in Serbia and resulted in uncontrolled and less noticeable creation of
special organizations.
Special organizations regulated by the Law on Ministries: Republic Secretariat for Legislation,
Republic Directorate for Commodity Reserves, Statistical Office of the Republic of Serbia, Republic
Hydrometeorological Service of Serbia, Republic Geodetic Authority, Republic Directorate for Assets of
the Republic of Serbia, Mine Action Centre, Intellectual Property Office of the Republic of Serbia.
Special organizations established by special laws: Geology Institute of Serbia, Public Procurement
Office, Seismological Survey of Serbia, Commissariat for Refugees of the Republic of Serbia, Security
Information Agency, Directorate for Railways, Republic Agency for Peaceful Settlement of Labor Dispute.
In addition to bodies within ministries and special organizations, this study explores
government services as well, categorizing them as agencies. They are not public
administration bodies in the strict sense; however, they make a part of the public administration
system, performing activities for the account of the Government. Their operations are regulated
by the regulations on organization, method of work, funding and employment in the public
administration. The Government creates such services by decree in accordance with the article
31 of the Law on the Government ('Official Gazette RS', no. 55/05, 71/05, 101/07, 65/08, 16/11,
68/12, 72/12).
Examples: The Human Resource Management Service performs the specialist tasks related to HR
management in ministries, special organizations, government services and support services of
administrative districts.
The Office for Cooperation with Civil Society conducts technical affairs pertaining to ensuring the
consistency of actions of public authorities and promoting the cooperation of public authorities with
associations and other civil society organizations.
2.1.2. Holders of delegated public powers
Holders of delegated public powers (imaoci javnih ovlašćenja) are all public sector
organizations that are delegated public powers to perform public administration tasks, and
encompass: public agencies, independent regulatory bodies, funds and foundations, public
enterprises, public institutions, associations, alliances, chambers, and similar bodies. This study
analyses public agencies and independent regulatory bodies and categorizes them as agencies,
according to the criteria set out in the Box 1. Public powers may be delegated to them just on
the basis of law.
Delegating public powers to agencies such as public agencies and independent regulatory
bodies is granted by the:
- Constitution of the Republic of Serbia (article 137), which stipulates, inter alia, that,
according to a law, particular public powers may be delegated to specific bodies through
which they perform regulatory function in particular fields or affairs, and
- Law on Public Administration (article 4), stipulating that some state administration tasks
may be delegated to the autonomous provinces, municipalities, towns and the town of
Belgrade, as well as to the public enterprises, public institutions, public agencies and
other organizations.
Draft Analysis of agencies in the Republic of Serbia — Page 21
While the Law on Public Administration represents the 'umbrella' law for state administration
bodies and their operations, the Law on Public Services ('Official Gazette RS', no. 42/91,
71/94, 79/2005, 81/05, 83/05) represents an 'umbrella' law for holders of delegated public
powers. The problem with the Law on Public Services is that it dates back to 1991, whereas
political, administrative and economic circumstances were completely different. In our view, the
Law on Public Services should have been improved and modernized, or even abolished. A new
law that would comprehensively regulate all possible organizational forms of holders of
delegated public powers (e.g. public agencies, independent regulatory bodies, public
institutions, funds and foundations, public enterprises) that would be possible to delegate public
powers to, should have been adopted, but it was not.
Instead, the Law on Public Agencies ('Official Gazette RS', no. 18/05, 81/05) was adopted in
2005, and made administrative structure even more complicated. Namely, it prescribes
additional organizational form for performing delegated public powers - public agencies.
Public agencies10 should be established if specific public administration tasks might be
performed more efficiently in that way (compared to state authorities that could conduct same
tasks), and if conducting these tasks does not entail constant political scrutiny (article 2 of the
Law on Public Agencies). However, the extent to which public agencies perform public
administration tasks more efficiently might be questioned, as in vast majority of cases,
there are no performance management indicators that could measure efficiency of
specific public agencies.11
Public agencies may have regulatory powers through adopting bylaws, as well as control and
executive powers. However, they neither may shape Governmental policy through creating and
adopting strategies and laws, nor they may carry out inspections (article 35 of the Law on Public
Agencies and article 54 of the Law on Public Administration). As a rule, public agencies have
higher degree of independence (legal, financial, managerial, personnel) compared to bodies
within ministries and special organizations, and are guaranteed to perform tasks without political
interference (article 4 of the Law on Public Agencies). However, this provision also could be
questioned, as directors of public agencies and members of their management boards
are appointed by their founder (the Government) (article 12 of the Law on Public Agencies),
and are under direct influence by political power.
Besides complicating existing state administration architecture instead of simplifying it,
another negative consequence of adoption of the Law on Public Agencies appeared.
Namely, this law facilitated establishment of different forms of 'hybrid' agencies. We
determined two types of agencies as 'hybrid' agencies:
- Agencies that operate in accordance with the provisions of the law regulating public
agencies, but have organizational form different from public agency, 12 and
10
Currently, public agencies enter in court registers; this undermines transparency of creation of public
agencies, and increases costs for third parties interested in the documents relevant for registration of
specific agency, etc.
11
For an assessment of the legal position of agencies in Serbia see also Tomic (2008).
12
This considerably made difficult our research, especially regarding classification of 'hybrid' agencies
and assigning them to the one or another category of agencies.
Draft Analysis of agencies in the Republic of Serbia — Page 22
-
Agencies whose organizational forms are not specified in the laws regulating
establishment and purview of such agencies (e.g. it is not specified that an agency is
public agency), however, the law specifies just that the agency operates in accordance
with the provisions of the law regulating public agencies.
The problem occurred as policy makers have used this opportunity to create hybrid
agencies in order to allow them considerably higher level of autonomy and somehow
privileged status compared to other agencies and even agencies that have same
organizational form.
Example of 'hybrid' agency type 1: The Republic Agency for Postal Services operates in accordance with
the provisions of the Law on Public Agencies, but is actually an independent regulatory body with the
Council being appointed and dismissed by the National Assembly.
Examples of 'hybrid' agency type 2: The laws regulating the Agency for Restitution and the Republic
Housing Agency do not determine exact organizational form of these agencies, but just that these
agencies operate in accordance with the provisions of the law regulating public agencies.
Independent regulatory bodies are also classified as holders of delegated public powers. The
term 'independent regulatory bodies' is used in this study to designate authorities established by
the Constitution RS and separate laws as 'autonomous and independent organizations' whose
basic role is to protect human and other rights guaranteed by the Constitution RS, and/or to
oversight and control operations of the Government and state administration bodies and
agencies. Independent regulatory bodies form the last category of agencies that are subject of
the analysis in this study, as they fulfill the criteria set out in the Box 1.
There is no general regulation (an 'umbrella' law) regulating establishment and operations of
independent regulatory bodies (such as, for example, the Law on Public Agencies representing
a legal framework for establishment and operations of public agencies). As noted, status of
some of independent regulatory bodies is regulated by the Constitution of the RS.
Independent regulatory bodies whose status is regulated by the Constitution of the RS are:
National Bank (article 95), State Audit Institution (article 96), Ombudsman (article 138), High Judicial
Council (article 153), Public Prosecution Office (article 156), and State Prosecutors (article 164).
Nevertheless, establishment and status of vast majority of these bodies are regulated by
separate laws. Separate laws mainly label these bodies as 'autonomous and independent
organizations'. Legal basis for delegation of public powers to independent regulatory bodies is
found in the Constitution of the Republic of Serbia (article 137) and the Law on Public
Administration (article 4). Formally, the laws prescribing establishment of independent regulatory
bodies stipulate that they are legally and functionally independent from the executive, legislative
and judicial power. However, it has been evident that independent regulatory bodies face
different problems in their day-to-day operations such as: lack of financial and human
resources, lack of space, political pressures, lateness of the constitution of these bodies
compared to the deadlines set up in the laws, etc.13
13
See Radojević, M. (2010), Orlović, S. (2010) i Šuput, D.
Draft Analysis of agencies in the Republic of Serbia — Page 23
Table 1. Responsibilities, functions, purpose of establishing and control of agencies in Serbia
Type of agency
Bodies
within
ministries
(administrations, inspectorates and
directorates)
(e.g. Tax, Customs and Treasury
Administrations, Directorate for Gender
Equality)
Government services
(e.g. EU Integration Office, Human
Resource Management Service, Office for
Regulatory Reform and Regulatory Impact
Analyses)
Special organizations (secretariats,
bureaus)
(e.g. Statistical Office of the Republic of
Serbia, Republic Hydrometeorological
Service Of Serbia, Public Procurement
Office,
Directorate
for
Railways,
Intellectual Property Office, Republic
Geodetic Authority, Mine Action Centre,
Security Information Agency)
Responsibilities and functions
Shaping the Government policy (preparation of regulations,
proposing development strategies and other measures);
monitoring; implementation of regulation (conducting
administrative procedure, recordings, issuing public
documents); inspections; monitoring of public services,
related development, professional and analytical activities.
Professional services that Government needs, and
coordination activities between different ministries and
agencies.
Purpose of establishing
Performing executive tasks such as inspections
and related professional and analytical tasks, if
nature or scale of tasks entails higher level of
autonomy compared to the autonomy of sectors
within ministries.
Control
Parent
ministries
Conducting professional or technical tasks that
are necessary to be performed for the
Government, or tasks that are common to
ministries and special organizations.
Government
The same responsibilities as bodies within the ministries,
plus implementation of laws and preparation of bylaws to
implement laws.
Government,
and parent
ministries if
prescribed
by
special
laws
Public agencies
(e.g. Bankruptcy Supervision Agency,
Privatization Agency, Medicines and
Medical Devices of the Republic of Serbia,
Republic Agency for Spatial Planning,
Ports Management Agency, National
Agency for Regional Development,
Agency for Ionizing Radiation and Nuclear
Safety of the Republic of Serbia, Agency
for Restitution, Republic Housing Agency)
Public agencies may be delegated executive (e.g.
development, professional and analytical tasks), regulatory
and even control tasks if prescribed by a special law. This
might include the following:
- development of areas where public agencies operate;
- distributing and administering financial resources
- implementation of laws and other type of regulation
(through preparing relevant bylaws)
- conducting administrative procedure, recordings,
issuing public documents.
Public agency may perform some additional tasks related
to the purpose of its existence, according to its statute.
Public agencies may not be delegated the tasks such as
shaping Governmental policies and inspections.
Regulatory, executive and control tasks that could be
performed in a justly, economic and efficient manner,
providing efficient control of the executive power and
protecting human and other citizens' rights.
Performing professional, analytical and related
executive tasks which nature entails higher
level of autonomy compared to bodies within
ministries.
Secretariats
perform
professional
and
analytical tasks important to state administration
authorities, and related executive tasks.
Bureaus perform professional and analytical
tasks that entail usage of specific methods and
knowledge, and related executive tasks.
Conducting development, professional or
regulatory tasks of public importance.
Public agency is established if:
- development, professional or regulatory tasks
of public importance do not entail continual and
direct political control, and
- if public agency can perform specific tasks
better and in a more efficient manner compared
to the holders of original public powers
(especially if it is financed in a whole or partially
from the fees that users of agency's services
pay for).
Execution of particular affairs falling within the
competence of the Republic of Serbia in the
interest of more efficient and rational exercise of
citizens’ rights and duties and satisfying their
needs of vital importance for life and work.
National
Parliament
Independent regulatory bodies
(e.g. Commission for Protection of
Competition,
Securities
Commission,
Republic
Agency
for
Electronic
Communications)
Draft Analysis of agencies in the Republic of Serbia — Page 24
Parent
ministries
2.1.2.1. Other public bodies
Several groups of other public bodies can be distinguished on the basis of their organizational
form:
- Public institutions (javne ustanove) (regulated by the Law on Public Services ('Official
Gazette RS', no. 42/91, 71/94, 79/05, 81/05, 83/05));
- Public enterprises (javna preduzeća) (regulated by the Law on Public Enterprises
('Official Gazette', no. 119/12));
- Funds and foundations (fondovi i fondacije) (regulated by the Law on Endowments and
Foundations ('Official Gazette', no. 88/10 and 99/11));
- Organizations for mandatory social insurance (organizacije obaveznog socijalnog
osiguranja), and
- Chambers (komore), associations (udruženja), alliances (savezi), and similar
organizations14.
Box 4. Public institutions in Serbia as holders of delegated public powers
Serbia has a long-standing tradition in creating public institutions, whereas some of them are amongst the
oldest public bodies in Serbia. There are various public institutions that perform tasks of public interest,
especially in such areas as sport, education, culture, science, environmental protection. However, the
problem is that there are a great number of public institutions performing delegated public powers in the
same area (for example, Anti-Doping Agency of Serbia and Republic Institute for Sports, Institute for
Quality Evaluation of Education and Institute for Improvement of Education), and there may be a
functional overlap between some of them.15
All these bodies were not analyzed in-depth, since it would exceed the scope of work of this
study.
2.2. Number of agencies in Serbia
Total number of agencies that were identified and analyzed for the purpose of this study is
presented in the Table 2.
Table 2. Number of agencies in the Republic of Serbia, according to their organizational form
Agencies analyzed
Bodies within ministries (administrations, inspectorates, directorates and bodies
within ministries with different names)
Governmental services and advisory bodies
Special organizations (secretariats, bureaus, and special organizations with
different names)
Public agencies
Independent regulatory bodies
Total
Total Number
14
31
19
17
15
25
107
According to the list made by the Office for Regulatory Reform and Regulatory Impact Assessment,
there are more than 30 associations, chambers, alliances, funds and foundations at the national level
exercising public powers. Some of them are: the Bar Association of Serbia, Chamber of Commerce and
Industry of Serbia, etc.
15
According to the list of public bodies made by the Office for Regulatory Reform and Regulatory Impact
Assessment, there are more than 50 public institutions at the national level. Nine public institutions were
created from 2000 onwards (just several of them became legal successor of previous public bodies, while
the majority is newly created).
Draft Analysis of agencies in the Republic of Serbia — Page 25
2.3. Misnomers - Inappropriate names of agencies do not reflect their organizational
forms
The database made for the purpose of this study illustrates variety of agencies that exist in
Serbia, pointing to the fact that they may have different organizational forms, names, legal
statuses (some of them have legal personality, others do not), and may be under auspices of
different state authorities (ministries, the Government or the National Parliament).
One of the problems that prevents easier grasp of agencies in Serbia is the fact that
names of some agencies and their organizational form are not correlated. There are
different types of mistakes.
1. Some names of the bodies within ministries (which, according to the article 29 of the Law
on Public Administration, should contain just administrations, inspectorates and
directorates) contain 'agency.'
Example: Agency for Environmental Protection is not a public agency, but body within the ministry.
2. A range of special organizations are not named secretariats and bureaus, inducing
public to think they have in fact different organizational form.
Examples: The Republican Directorate for Commodity Reserves, Republic Directorate for Property of
Republic of Serbia, Mine Action Center, Directorate for Inland Waterways, Public Procurement Office,
Commissariat for Refugees of the Republic of Serbia, Directorate for Railways, Republican Agency for
Peaceful Resolution of Labor Disputes and Central Registry for Mandatory Social Insurance are all special
organizations.
3. Some public agencies have such names that do not point to the fact that the specific
public agency is a public agency, but rather body with different organizational form.
Examples: Civil Aviation Directorate is a public agency, rather than body within ministry.
4. There is also an example of one Governmental service which name and organizational
form are not correlated.
Example: Administration for Joint Services of the Republic Bodies is a Government service, not a body
within ministry.
5. Finally, several enterprises performing public activity of general interest that are holders
of delegated public powers contain in their names - 'directorate', 'agency' or 'register'.
Examples: Building Directorate of Serbia, Serbian Export Credit and Insurance Agency, Central Securities
Depository and Clearing House.
The fact that names of abovementioned agencies and their organizational form are not
correlated point either to intentional action of policy makers to create numerous 'hybrid' agencies
with quite broad specter of responsibilities and high autonomy (which confuses the public to a
great extent), or simply they were not completely aware of what type of agency they created.
Draft Analysis of agencies in the Republic of Serbia — Page 26
2.4. Possible overlap between jurisdictions and functions of different agencies
Annex 3. shows areas where agencies operate in Serbia. Total number of agencies
presented in this annex is not exhaustive. However, it is indicative concerning the number of
agencies that act in the same area, pointing to possible overlap between powers and remits of
different agencies. For example, in the area of economy and finance, there is the greatest
number of agencies (more than 25) carrying out original and delegated public administration
tasks. This result could be expected, as in some other countries there are also numerous
agencies in the areas of economy and finance16
An in-depth analysis of whether and to what extent functions and remits of different agencies in
Serbia overlap is of crucial importance. This study suggests reorganization of agencies,
whereas one of the criteria for merging, absorption and/or abolition of agencies is whether functions and/or tasks of different agencies overlap each other. It is of vital
importance to reduce the number of agencies and other public bodies acting in the same areas,
for several reasons. Firstly, in the situations when several agencies are in charge of
implementation of a specific law, sometimes it is impossible to determine which body is actually
responsible for implementation of regulation, monitoring and scrutiny, leading to the coordination
problem. Secondly, increased scrutiny raises budgetary costs. Finally, smaller number of
agencies leads to smaller number and lower level of para-fiscal charges (i.e. administrative,
informational and financial requirements).
2.5. Agencies' autonomy
The level of agencies’ autonomy has several aspects – legal, financial, managerial and
personnel, and policy autonomy.
1. Legal autonomy - consists of three sub-aspects:
- Organizational form – i.e. whether agency has been established as a body within a
ministry, governmental service, special organization, public agency or as a
independent regulatory body (agencies that are at a greater distance from the parent
ministries/Government are more autonomous, and vice versa);
- Way of establishment – i.e. whether an agency is established by law or by
regulation (agencies established by law have higher degree of autonomy than those
established by some other regulation);
- Legal personality – i.e. whether an agency has legal personality. This aspect of legal
autonomy had been directly related to the financial autonomy for a long time, since
agencies having legal personality used to have separate financial accounts with
commercial banks, and, consequently, own-source revenues. This had aggravated
control of agencies' revenues and expenditures by the Treasury.
2. Financial autonomy – whether an agency uses only budgetary resources or it has a
possibility to charge fees and charges.
16
Van Thiel, S. and CRIPO team (2009)
Draft Analysis of agencies in the Republic of Serbia — Page 27
3. Managerial and personnel autonomy - who appoints managers of agencies, as well as
whether agencies employ civil servants and appointees, or hire on the basis of the Labor
Law.
4. Policy autonomy depends on two criteria:
- Whether an agency performs regulatory tasks. Agencies that may issue some kind of
regulation have higher policy autonomy compared to those that may take just decisions
on individual cases within externally set laws and regulations i.e. perform clearly
executive tasks such as law implementation, professional and development activities,
etc., and
- Whether an agency controls and/or scrutinizes implementation of regulation.
Agencies that control and/or scrutinize implementation of regulation are granted the
highest level of policy autonomy. The focus here is not on inspection tasks, but on the
overall control of implementation of regulation.
2.5.1. Legal autonomy
a. Legal autonomy and organizational form
The easiest way to describe the legal autonomy of various types of agencies with respect to
their organizational form is using a pyramid structure, with bodies within ministries and
governmental services having the lowest and independent regulatory bodies having the highest
level of autonomy (Figure 2). Similarly, various organizational forms presented in the Table 3.
are distinguished in accordance with their level of legal autonomy.
Figure 2.
Draft Analysis of agencies in the Republic of Serbia — Page 28
Table 3. Autonomy of agencies granted by law
Type of agency
Bodies within
ministries
Governmental
services
Special
organizations
Public
agencies
Independent
regulatory
bodies
Autonomy
Bodies within ministries have greater autonomy compared to sectors, divisions,
departments and groups within ministries.
Bodies within ministries exercise public powers independently, but competent minister
directs their activities, adopts regulations governing their area of performance and
aligns their work with work of other state authorities.
Governmental services have higher level of autonomy compared to bodies within
ministries. They report to the Prime Minister/General Secretariat of the Government of
Serbia.
Special organizations have greater autonomy compared to bodies within ministries
and governmental offices.
The Government may direct special organizations' execution of policies and
implementation of laws and other regulations, align their work with work of other state
authorities, and set the deadlines for adopting regulations to the special organizations.
When prescribed by law, parent ministry may steer a special organization, which
decreases special organization's autonomy, but it is not always the case.
Public agencies have greater autonomy compared to bodies within ministries,
governmental services and special organizations. They are independent in performing
their tasks, and the Government may not neither direct public agencies' operations nor
align them with the operations of state administration bodies.
Independent regulatory bodies have the highest level of autonomy. As a rule, they
report to the Parliament. The law sometimes grants to these bodies just functional
independence from state authorities (executive power), but in some cases both functional and financial independence.
b. Establishment of agencies and legal autonomy
The vast majority of agencies in Serbia were established by law.17 Namely, ministries,
bodies within ministries, special organizations, and regulatory independent bodies in Serbia are
founded and may be terminated by law. Governmental services are established and may be
abolished by regulations (i.e. decrees). Although public agencies were mainly established by
law, according to the article 9 of the Law on Public Agencies, they may be founded by
regulation. Hence, some public agencies were established by regulation such as governmental
decisions (e.g. Serbia Investment and Export Promotion Agency). On the one hand, this means
that the Government may more freely decide on 'death' of agency established by regulation,
which reduces agency's autonomy. On the other hand, this opportunity was and may be used
in the future by policy makers to create excessive public agencies in Serbia.
c. Legal personality and legal autonomy
In vast majority of countries there is a clear distinction between the so-called semi-autonomous
agencies and regular type of agencies. Semi-autonomous agencies have no legal
independence, while 'regular' type of agencies does have legal personality (see Section 4.3).
Similar division between semi-autonomous agencies (e.g. bodies within ministries and
special organizations) and regular type of agencies (public agencies) could not be made in
Serbia. In Serbia all public agencies and many semi-autonomous agencies (e.g. bodies within
ministries and special organizations) have legal independence.
17
In Croatia, also, majority of agencies were established by law (see: Musa, A. and Kopric, I. (2010)).
Draft Analysis of agencies in the Republic of Serbia — Page 29
Examples: Administration for the Transport of Dangerous Cargo, Directorate for the Management of
Seized Assets, Directorate for National Reference Laboratories, Environmental Protection Agency, and
Commission for State Aid Control are bodies within the ministries with legal personality.
The level of autonomy sometimes has nothing to do with the existence of legal personality.
Some special organizations (that pursuant to the Law on Public Administration (article 33) have
higher degree of autonomy than bodies within ministries), have no legal personality. This refers
especially to special organizations that were established by the Law on Ministries.
Examples: Statistical Office of the Republic of Serbia, Republic Geodetic Authority, and the Intellectual
Property Office of the Republic of Serbia do not have legal personality.
Even some regulatory independent bodies do not have legal personality.
Examples: Commissioner for Information of Public Importance and Personal Data Protection and
Commission for the Examination Responsibility for Violation of Human Rights do not have legal
personality.
Recent study18 argues that agencies in Serbia have used a possibility to become legal entities to
avoid governmental regulation with regard to financing. Namely, having a legal personality
has enabled different agencies to manage their revenues and expenditures through bank
accounts, rather than through the consolidated Treasury account, which has increased
their overall level of autonomy (see Subsection 2.5.2.).
As already mentioned, the discretion of bodies within ministries and special organizations to
have legal personality is granted by the Law on Public Administration (articles 28 and 34). This
law allows legal personality to be granted by some special law. However, Serbian legislation
does not provide clear criteria and reasons for granting legal personality. As a result,
some agencies within the same category have legal personality, while others not. Finally,
if ministries do not have legal entity, it is not clear why bodies within ministries and
special organizations should have it. Table 4. shows which groups of agencies may have
legal personality according to the relevant legislation.
Table 4. Agencies and their legal status
Agencies
Legal personality according to the legislation
Bodies within Ministries
Yes if prescribed by the special law
Governmental Services
No
Special Organizations
Yes if prescribed by the special law
Public Agencies
Yes
Independent Regulatory Bodies
Yes if prescribed by the special law
2.5.2. Financial autonomy
The Law on Public Administration (articles 6 and 52) prescribes that agencies obtain resources
for operating (e.g. business space, equipment and other work assets) from the Budget of the
18
Fiscal Council (2012), p. 146-150.
Draft Analysis of agencies in the Republic of Serbia — Page 30
RS. Table 5. shows how agencies were financed before the last amendments of the Budget
System Law.
Table 5. Financial sources of agencies before the last amendments of the Budget System Law
Type of Agency
Bodies within ministries
Governmental services
Special organizations
Public agencies
Independent regulatory bodies
Financing
Budget, while some of them had own-source revenues
Budget
Budget, while some of them had own-source revenues
The execution of the tasks delegated to public agencies was financed
with budgetary resources and revenues gathered from services sold to
businesses and citizens. Resources for start-up (space, equipment and
other work assets) may be provided from the Budget and/or existing
assets of the founder/Government, while gifts (donations) and
contributions provided by residents and non-residents are treated as
own-source revenues of agencies, and may be used as start-up
resources or for agency's development.
The founder (the Government) is a last resort in cases when public
agency is not able to fulfill its (financial) obligations by means of its
assets, or if it would endanger its operations.
Budget and own-source revenues
a) Utilization of own-source revenues by agencies
Many agencies have used the opportunity to charge businesses and citizens for services
provided. As a result, several problems regarding own-source revenues of users of public funds
have appeared:
- A lack of transparency - especially regarding level of fees agencies generate,
methodology for their determination, and justification for charging (agencies have used
their discretion to impose a variety of non-tax and para-fiscal levies on the basis of
sectoral laws, regulations, and decisions19);
- A significant portion of own-source resources has turned out to be not included
into the consolidated Treasury account;
- In some cases, even when resources of some agencies were incorporated into the
consolidated Treasury account, these resources have not been directly managed by
the Treasury; rather, they were on the agencies' accounts with commercial banks,
not available to the Treasury; hence, their way of utilization have been left to
agencies (and very often not transparent).
Moreover, own-source revenues used to be left available to agencies in a whole, while unspent
proceeds used to be transferred to the next fiscal year. This was a common practice of agencies
until the Government has decided to transfer all own-source revenues of budget beneficiaries to
the general budget revenues and amended the Budget System Law ('Official Gazette RS', no.
54/09, 73/10, 101/10, 101/11, 93/12).20 This sort of reform has been implemented in other
19
NALED's study named The system of non-tax and para-fiscal charges in Serbia: Inventory, analysis of
effects, recommendations for reform has identified at least 179 para-fiscal charges among the 370 nontax dues. This para-fiscal charges were defined as charges that pose a financial and/or administrative
burden to businesses and do not confer any rights/ or result in the provision of services or goods, or do
confer rights/ or result in the provision of services or goods the objective value of which (or the cost
incurred by the body in providing such services) is significantly lower than the amount payable.
20
Prior to that, the Government was still empowered by the Budget System Law to channel a portion of
these revenues to general budget revenues (i.e. the article 59 of the Budget System Law enables the
Draft Analysis of agencies in the Republic of Serbia — Page 31
countries from the region as well. For example, in 2009 the Romanian Government enacted an
ordinance that significantly reduced agencies' abilities to find alternative sources of income, like
fees, in order to have a better control over governmental spending. 21
In the Annex 4. we present the results of the survey of agencies on their major revenue and
expenditure categories. Due to extremely low response rate, we are not able to infer much from
the survey. Based on these data, we may just speculate that significant number of agencies
used to have large financial autonomy. Own-source revenues without doubt motivated agencies
to make their procedures as complicated and numerous as possible. On the other hand,
significant improvement of the operations and increasing efficiency of some agencies in Serbia
may be an argument for financial independence of at least some agencies22.
b) Improving financial scrutiny
According to the Budget System Law ('Official Gazette RS', no. 54/09, 73/10, 101/10, 101/11,
93/12), users of public resources are obliged to ensure financial management, control and
internal audit. Direct and indirect budgetary users, and organizations for mandatory social
insurance are obliged by the Budget System Law to provide financial plans and financial reports
annually (article 54). State Audit Institution monitors financial reports of all users of public
resources, as well as appropriateness, correctness and legality of their operations (which is, in
fact, a kind of efficiency control) (article 5 of the Law on State Audit Institution ('Official Gazette
RS', no. 101/2005, 54/2007, 36/2010)); budget inspection monitors users of budgetary
resources, organizations for mandatory social insurance, and different legal entities that use
budgetary resources on different basis (article 84 of the Budget System Law), while Fiscal
Council scrutinizes spending by the Government and budgetary resources utilization in general
(articles 92e and 92ž of the Budget System Law).
Nevertheless, three controllers seem not to be enough to provide fiscal discipline. Hence,
some of the latest activities of the Ministry of Finance and Economy have been aimed at
reducing financial autonomy of agencies. First of all, some specific fees and charges, and even
budgetary funds (e.g. Fund for Forests), that were regarded as unnecessary burdens to the
private sector and citizens, were eliminated through changes and amendments of relevant laws.
This has reduced financial autonomy of particular agencies. Secondly, the new Budget System
Law was adopted by the National Parliament. It prescribes that the Treasury will have to keep
more comprehensive and accurate registrations of users of public resources, including public
agencies. Also, the Law prescribes greater transparency with regards to financial reporting,
obliging users of public resources to publish their financial plans for the following year, balance
sheets and financial reports on their websites. Moreover, the Law stipulates that the minister in
charge should adopt a list of users of public resources, including public agencies, and publish it
Government to regulate terms, conditions and methods for utilization of those revenues stemming from
activities performed by budget beneficiaries). However, for the first time, the Government decided to
transfer own-source revenues of seven budget beneficiaries to the general budget revenues in March
2012 by adopting the Program of Measures to Sustain the Fiscal Deficit of the Government of the
Republic of Serbia.
21
Hintea, C., Hudrea, A. and Balica, D. (2010) Patterns of control in the Romanian executive agencies: An
exploratory research, Transylvanian Review of Administrative Sciences, Special Issue, p. 135.)
22
Establishment and functioning of the Business Registries Agency could be a positive example of
agency that charges for its services, but at the same time increases its efficiency and improves operations
which is measured by performance indicators introduced into the daily operations of this agency.
Draft Analysis of agencies in the Republic of Serbia — Page 32
on the website of the ministry in charge. However, this list has not been published yet. All this
measures have a potential to reduce factual financial autonomy of agencies, but the Budget
System Law has to be implemented properly.
As mentioned above, the new Budget System Law (article 47s3) prescribes that agencies are no
longer able to use their fees and charges, as all own-source revenues are redirected to the
Budget and controlled by the Treasury. Pursuant to the new Budget System Law, agencies
are obliged to open an account with the Treasury where own-source revenues would be
collected (article 49). This means that the Treasury will have an insight into the revenues
and expenditures of agencies, instead of letting them have separate accounts with
commercial banks, collect own-source resources themselves and manage them
independently for daily operations and other purposes. Exceptions may be made in case
the minister in charge allows some agency to open a separate account with a commercial bank
for special purposes (not for regular operations). But then again, given the implementation of the
Law, agencies still have accounts with commercial banks, and have not been introduced into the
Treasury system yet.23 This may be the result of the fact that the deadline for opening
accounts with the Treasury by agencies is not prescribed by the Budget System Law.
In addition, pursuant to the Budget System Law (article 46s3), relevant authorities responsible
for establishing and determining level of fees and charges need to obtain an approval from the
minister in charge of finance and economy for each fee/charge prior to the end of March 2013.
The period of one month was left to relevant authorities to establish level of each fee/charge and
ask the relevant ministry for an approval. However, at the time of writing, the deadline is
approaching, but this proposition has not been implemented yet. Moreover, ancillary law
governing payers, level, methodology for establishing level and paying of fees and
charges for using public services and goods of public importance, have not been
adopted yet.
Overall, the amendments to the Budget System Law represent positive step that
introduces control mechanisms of revenues of Serbian agencies. However, full
implementation of the Budget System Law is necessary. Furthermore, better control of
agencies' expenditures and enabling severe cuts are necessary in the second phase of
reform, if efficiency and accountability of agencies are to be increased. This could be
accomplished through reorganization of agencies, 24 and on the basis of further in-depth
analysis, audit and control of previously planned projects and programs of agencies,
their procurement procedures and contracts.
2.5.3. Managerial and personnel autonomy
According to the Law on Public Administration, public administration tasks are performed by civil
servants (article 84). Their rights and duties are regulated by the Law on Civil Servants ('Official
23
Information provided by the Treasury, Ministry of Finance and Economy, Government of the Republic of
Serbia
24
The extent to which reform of agencies would yield savings could be hard to assess exactly, but some
preliminary estimations could be made. The Fiscal Council estimated that proposed consolidation of
budgetary beneficiaries and extra-budgetary funds would ensure aggregate impact of 1,5% of GDP from
2012 to 2016 (see: Fiscal Council (2012) Proposed fiscal consolidation measures for 2012-2016, p. 155.).
Draft Analysis of agencies in the Republic of Serbia — Page 33
Gazette RS', no. 79/05, 81/05, 83/05, 64/07, 67/07, 116/08, 104/09) and the Law on Maximum
Number of Employees in the Administration of the Republic of Serbia ('Official Gazette RS', no.
104/09).
Salaries of civil servants and appointees are regulated by the Law on Salaries of Civil Servants
and Appointees ('Official Gazette RS', no. 62/06, 63/06, 115/06, 101/07, 99/10) and the Law on
Establishing Maximum Level of Salaries in the Public Sector ('Official Gazette RS', no. 93/12).
Related issues that are not regulated by these laws are regulated by the Labor Law ('Official
Gazette RS', no. 24/05, 61/05, 54/09).
Internal organizational structure and classification of posts in public authorities and the
Governmental services, and precise number and structure of employees, are laid down in the
rulebooks on internal organizational structure and classification of work posts for each individual
authority. These rulebooks have to be based on the Decree on internal organizational structure
and classification of work posts in the ministries, special organizations and Governmental
services ('Official Gazette RS', no. 81/07, 69/08, 98/2012). Governmental agreement is
necessary, as well as opinions obtained from the ministries in charge of state administration and
finance, and human resources management service of the Government. This indicates that
there is a relatively strict formal control when it comes to the employment of civil servants and
appointees.
Table 6. An overview of employment modalities and appointments in agencies
Type of
agency
Bodies within
Ministries and
Special
Organizations
Public
Agencies
Governmental
Services
Independent
Regulatory
Bodies
Management and other employees
According to the Law on Public Administration, employees, as well as directors and
assistant directors in bodies within ministries and special organizations, and deputy
director in special organizations bodies, are civil servants.
Directors and assistant directors in bodies within ministries are appointed by the
Government (on the basis of ministers' proposals) and are accountable to the minister.
Directors, deputy director and assistant directors in special organizations are
appointed by the Government, whereas Prime Minister proposes a director, and
director proposes deputy director and assistants to be appointed. Consequently,
director is accountable to the Government, while deputy director and assistants are
accountable to the director.
The Labor Law applies to the rights and obligations of the management and
employees, as well as their salaries and responsibilities, unless it is specified
differently by the Law on Public Agencies or some special law.
Main bodies of public agencies are management board and director. Director and
members of management board are appointed by the founder (the Government).
According to the Decree on Governmental services, employees are civil servants. The
Government appoints director on the proposal of the Prime Minister or General
Secretary of the Government. Director is a high-level civil servant. Deputy director and
assistant director may be appointed if it is prescribed by the regulation establishing
specific Governmental service. Director proposes them to be appointed, while
Government appoints them. They are also high-level civil servants.
According to the specific laws regulating establishment of and delegation of public
powers to independent regulatory bodies, their employees are engaged under the
Labor Law.
Draft Analysis of agencies in the Republic of Serbia — Page 34
Regardless of the fact that people working in bodies within ministries, special
organizations and Governmental services should have status of civil servants,
employment on the basis of the Labor Law has become widespread in these agencies
recently.
On the one hand, there may be different reasons for this state of affairs (e.g. public job
competitions have not been completed yet). Still, agencies need to operate normally, so the only
solution is to employ people on the contracts on temporary and periodical work, or special
services contracts. On the other hand, this might be regarded as misusing the Labor Law, Law
on Civil Servants and Appointees and evading the Law on Maximum Number of Employees in
the Administration of the Republic of Serbia. Namely:
 The Labor Law is abused in the two following aspects:
- the articles 197 and 198 of the Labor Law regulate employment on the basis
of the contracts on temporary and periodical work, prescribing that this type
of engagement may last maximum 120 days annually for the specific job/task per
person. However, ministries and agencies abuse this rule by changing the
contracts every four months in terms of the tasks that same employees perform.
In doing so, it is possible to employ people on that basis for much longer period
of time than prescribed by the Labor Law;
- the article 199 of the Labor Law regulates special service contracts, and
prescribes that ministries and agencies conclude a special service contract with a
particular person to perform tasks beyond the scope of the activity of employer,
for the purpose of independent execution of, among others, certain physical or
intellectual work. However, very often the employee perform tasks falling within
the scope of activity of the employer;
 The article 63 (paragraph 2) of the Law on Civil Servants and Appointees
prescribes that fixed-term employment may not develop into non fixed-term
(permanent) employment, except in cases when a trainee passes state or special
professional exam. However, there are cases of misusing of this article in practice,
whereas ministries and agencies firstly engage particular person to work for a certain
period of time, and after that conclude a non fixed-term (permanent) employment
contract with the person, and
 All this represents an opportunity for unlimited increase in the number of people
working in the public sector, making control of engagement in the public sector
impossible, and leading to the evading of the Law on Maximum Number of
Employees in the Administration of the Republic of Serbia.
One of the main reasons for this state of affairs is the article 63 (paragraph 3) of the Law
on Civil Servants and Appointees. Namely, it prescribes that fixed-term engagement
(such as temporary and periodical work, special service contracts, etc.) is established
without the internal and public job competitions, except for employment of a trainee. This
opens up an opportunity to engage a large number of people with no adequate skills,
knowledge and qualifications in the public sector. Moreover, engagement under the
Labor Law offers an opportunity for significant increase in salaries which are even
several times higher than civil servants' salaries.
Draft Analysis of agencies in the Republic of Serbia — Page 35
Box 5. Salaries in the public sector in Serbia
Wages of employees in public agencies, budgetary funds, and regulatory and independent government
bodies were significantly higher compared to wages in other government bodies. In some cases, average
wages were four times higher compared to the average in the government administration. These
differences could be partly explained by higher qualifications (compared to the average qualification of
employees in government bodies) in bodies with small number of highly-educated employees.
Furthermore, it was the common practice for some bodies to pay overtime, standby duty and other
allowances without justified reasons in order to increase wages.
Source: Fiscal Council (2012) Proposed fiscal consolidation measures for 2012-2016, p. 153-154.
Finally, negative selection of cadre in the public sector has been evident in several cases,
especially in terms of appointment of political associates to the managers' and directors'
positions in agencies who do not have required competencies, skills and knowledge.
a) Control of employment in agencies
Some steps forward have been made regarding better control of the number of employees and
salaries in the public sector. Firstly, the National Parliament adopted the Law on Maximum
Number of Employees in the Administration of the Republic of Serbia in 200925 ('Official
Gazette RS', no. 104/09). The law limits number of employees in the state administration bodies
and agencies (article 2). The law obliges ministry in charge of finance to make a register of
employees in the public sector and their salaries, and publish it on its website, while at the
same time, obliges holders of original public powers, public agencies and organizations for
mandatory social contribution to publish numbers of their employees and salaries on their
websites at the end of every month (article 6). Nevertheless, the latter provision has never
been implemented and there is no deadline specified in the Law.
Newly adopted Law on Establishing Maximum Level of Salaries in the Public Sector
('Official Gazette RS', no. 93/12) tries to solve the problems of lack of control over the number of
employees and salaries in agencies in a similar way as the Law on Maximum Number of
Employees in the Administration of the Republic of Serbia does. Namely, it obliges public
agencies, organizations that operate in accordance to the law regulating public agencies, and
organizations for mandatory social contribution to report on the number of employees to the
ministry in charge of finance, their positions and salaries paid at the end of the month, at most
ten days after the payment has been made (article 8). A bylaw prescribing report form should
have been adopted, but it was not.
On the other hand, as this Law primarily deals with limitation of maximum level of salaries in the
public sector (including public agencies, organizations that operate in accordance to the law
regulating public agencies, and organizations for mandatory social contribution), it has shown
25
The Law on Maximum Number of Employees in the Administration of the Republic of Serbia regulates
maximum number of employees in the public administration that are permanently employed. The
agencies that are exempted are Security Information Agency and Directorate for Enforcement of Prison
Sanctions. Also, it regulates maximum number of employees that could be employed because of the
increased workload, such as persons employed on contract, contract of temporary and occasionally work,
through youth and student associations, and similar, that cannot exceed 10% of employees employed
permanently. Agencies that are exempt from the second limit are Treasury Administration, Republic
Hydrometeorological Service of Serbia, Statistical Office of the Republic of Serbia, Republic Geodetic
Authority and some people working in the Serbian European Integration Office and translating EU Acquis
Communitarie.
Draft Analysis of agencies in the Republic of Serbia — Page 36
some positive effects. Namely, it has reduced excessive salaries in agencies and some public
companies, reducing also average level of salaries in these organizations. 26 But, all in all, this
Law has rather limited influence. It does not resolve the problem related to the fact that people
working in the public sector (particularly agencies) and having exactly the same qualifications
and jobs, still receive different salaries (i.e. salaries of people working in the public sector
between the maximum and minimal level still vary to great extent). Abovementioned
register, if composed, should provide database of all people working in the public sector, and
hence, has to be adopted as soon as possible. Otherwise, it will not be possible to determine
neither exact number of people working in the public sector (especially in agencies), nor total
number of people performing specific type of job, while their level of salaries would be still
uneven and even unknown to the public.
b) Management boards in public agencies
Management boards took over the role of steering boards of public agencies established prior to
2005, pursuant to the Law on Public Administration (article 58). While this decreased autonomy
of public agencies to some extent, the existence of management boards still means increased
independency of public agencies from the central Government. At the same time, this decreases
effective control by parent ministries/the Government, as management boards execute direct
control over public agencies. Moreover, the Law on Public Agencies (article 23) prescribes
that public agency director has to report to management board only if asked for the
report. This does not mean that management boards normally ask directors for reports.27
Rather, this means that prescribed way of control of public agencies by management boards
may not be an effective solution, as it does not imply any obligation for management board
to control directors on a regular basis. There are three additional concerns:
-
a large number of management boards' members (up to 7) makes governing in
public agencies complicated and expensive,
an extent to which management boards' members are independent from
political influences and parties is questionable, and
skills and knowledge of management boards' members to govern public
agencies (especially those that operate in highly profiled areas such as energy,
telecommunications, postal services, etc.).
The composition of management boards and the way of appointing directors needs further
examination. Nevertheless, the role of management boards in public agencies is not clear
at all, and it could be questioned what is their value added and if there is an objective
need for them to exist.
2.5.4. Policy autonomy
An agency has high policy autonomy when it may issue some kind of regulation and/or control
and scrutinize implementation of regulation.
26
http://www.novosti.rs/vesti/naslovna/aktuelno.239.html:409370-Plate-Samo-kod-drzave-nema-krize
This happened last year when management board of the Anti-corruption Agency (which is an
independent regulatory body) tried to control operations of then director, starting the procedure of
replacement of director afterwards.
27
Draft Analysis of agencies in the Republic of Serbia — Page 37
Regulatory tasks in Serbia may be performed by:
- Ministries and special organizations (according to the Law on Public Administration),
- Public agencies (pursuant to the Law on Public Agencies), and
- Independent regulatory bodies.
On the other hand, almost all agencies perform executive tasks at least to some extent. Hence,
there are agencies that perform both regulatory and control tasks (may be public agencies and
independent regulatory bodies), both regulatory and executive tasks (may be especial
organizations, public agencies, and independent regulatory bodies), and clearly executive tasks
(may be bodies within ministries, public agencies, and Governmental services).
Table 7. Examples of regulatory and control agencies, agencies that perform regulatory and
executive tasks, and executive agencies in Serbia
Independent Regulatory and
Agencies that perform
Executive Agencies
Control Agencies
regulatory and
executive activities
Republic Agency for Postal Services Republic Agency for
Republic Agency for Housing
Energy Agency
Electronic
Agency for Restitution
Anti-corruption Agency
Communications
Serbia Investment and Export
State Audit Institution
National Agency for
Promotion Agency
Securities Commission
Regional Development
Republic Agency for Spatial Planning
Civil Aviation Directorate
Ports Management
Road Traffic Safety Agency
Agency for Ionizing Radiation and
Agency
Privatization Agency
Nuclear Safety
Deposit Insurance Agency
Bankruptcy Supervision Agency
However, criterion for higher or lesser level of autonomy is whether agency is delegated
to perform regulatory and/or control tasks. The highest autonomy is granted to the
independent regulatory bodies that perform regulatory and control activities. Medium-level
autonomy is given to agencies performing both regulatory and executive tasks, while the lowest
level of autonomy is given to the executive agencies in Serbia. The last initiative of the
Government of Serbia towards reduction of the number of agencies has also shown that policy
autonomy has been important criterion for (not) abolition of agencies.28
2.5.5. De facto and de jure autonomy of agencies
To be able to understand the issues related to the autonomy of agencies, we should clearly
make a distinction between de jure (formal) and de facto (functional, actual) autonomy of
agencies in Serbia. The former represents the level of autonomy granted by law, while the
latter refers to actual autonomy of an agency (performing activities without interference of
28
For example, the Energy Efficiency Agency that was conducting purely executive tasks was abolished.
On the other hand, although it was nominated for abolition, the Agency for Ionizing Radiation and Nuclear
Safety of the Republic of Serbia was not abolished, whereas one of possible explanations is that policy
makers quit from abolishing this agency because of its high policy autonomy that encompasses
performing regulatory tasks (see Box 18.).
Draft Analysis of agencies in the Republic of Serbia — Page 38
external bodies). It is hard to say that any agency in Serbia is completely autonomous in
practice, rather, we could argue that agencies are more or less autonomous.29
Before the latest efforts of the ministry in charge of finance and economy to increase control of
public finances, de jure financial autonomy was differing from de facto financial autonomy of
agencies (i.e. agencies managed to use their discretion to increase own-source revenues and
utilize them by their own). After the system of the control of public finances changed, de
jure financial autonomy of agencies has been reduced. After the latest amendment to the
Budget System Law, specific fees and charges of agencies were abolished, while all ownsource revenues of budget beneficiaries are transferred to the general budget revenues. In
addition, better overall control of users of public resources by the Treasury (through closing
commercial bank accounts and opening accounts with the Treasury) is envisaged, as well as
greater transparency regarding financial reporting of agencies. Nevertheless, it could not be
said that de jure and de facto financial autonomy are equaled now30, especially given the
fact that it has not been done much with respect to expenditures of agencies, still leaving
agencies huge autonomy when utilizing their resources.
De jure personnel autonomy of agencies has also been deviated in practice. Regardless of
the fact that people working in bodies within ministries, special organizations and Government
services should have status of civil servants, employment under the Labor Law has become
widespread in these agencies. This has made hard to control the number of employees in the
public sector. Hence, additional legislation was adopted (i.e. the Law on Maximum Number of
Employees in the Administration of the Republic of Serbia) in order to diminish de facto
personnel autonomy (e.g. on the total number of employees in the public sector, reporting on
salaries and employees, etc.). However, de facto personnel autonomy has not been reduced in
practice, nor the transparency of employment in agencies has been achieved. Because of this,
even more comprehensive regulation was adopted (i.e. the Law on Establishing Maximum Level
of Salaries in the Public Sector). It depends on the implementation of the newest adopted
legislation whether de facto and de jure personnel autonomy will be equal or at least
approximately equal in the future.
As regards to the managerial autonomy of public agencies, the fact that the Government
appoints director and management boards' members should be stressed. This might mean that
de facto managerial autonomy of public agencies is diminished in practice compared to
29
Beljanski. S. (2008) Regulatorna i kontrolna tela u Republici Srbiji, Pregled Republika Srbija (2/2008),
Javna Ustanova „Jugoslovenski pregled“, Beograd.
30
Similarly, these issues need to be discussed in the case of independent regulatory bodies. It should be
stressed that some independent regulatory bodies use budgetary resources (e.g. Anti-corruption Agency,
State Audit Institution, etc.), which decreases their financial and overall autonomy making them
dependent on the Government. Moreover, lack of resources and improper conditions for their operations
has caused practical problems in their functioning. Furthermore, there is a delay in constitution of some of
independent regulatory bodies (the deadlines for their constitution prescribed by law were not respected).
Also, there is low cooperation with other state bodies, and state authorities do not respect opinions and
recommendations of regulatory independent bodies in all cases. Finally, there are also political pressures
that complicate functioning of independent regulatory bodies in the Republic of Serbia (see Radojević, M.,
2010, p. 73). All this makes de facto autonomy much lower than de jure autonomy of independent
regulatory bodies in practice.
Draft Analysis of agencies in the Republic of Serbia — Page 39
de jure managerial autonomy. As already stated, factual independence of management
boards' members from political elites could be questioned as key aspects of de facto autonomy
are possibly undermined through political influences.
Finally, the Law on Public Administration prescribes that, when performing delegated state
administration tasks, holders of delegated public powers have the same obligations and rights
as the state administration authorities, while the Government and state administration authorities
are still responsible for implementation of delegated tasks (article 51). However, given that final
responsibility lies on the relevant ministry, one could consider that holders of delegated public
powers are not that responsible for their operations as it could be expected when compared to
the level of autonomy guaranteed by the Law. Moreover, if a holder of delegated public powers
does not start performing delegated tasks or does not perform them correctly and/or in a timely
manner, it may be warned by the state authorities several times. Even then, a holder of
delegated public powers does not have to proceed according to the instructions, as relevant
state authority starts performing the tasks for 120 days at most (article 56). Although it is
necessary for the state authorities to be the last resort when it comes to performing
public powers, the Law on Public Administration leaves additional space for bargaining
between holders of delegated public powers and relevant state authorities when
performing delegated public powers. Similarly, although parent ministries and the
Government are granted an opportunity to control agencies to a certain extent, de facto
control in majority cases takes just formal form, as agencies prepare and send
provisional reports on their operations to the ministries or the Government, which are not
analyzed thoroughly.
2.6. Performance management
The Republic of Serbia (as it will be shown later, in many EU countries also) adopted creation of
agencies as a model of reform to increase effectiveness and efficiency of the public sectors.
However, Serbia has not implemented other aspects of public sector reforms such as
introduction of performance management in a systematic way (i.e. setting up of
performance targets and measuring the performance of agencies), which would facilitate
measuring of effectiveness and efficiency of agencies31. Rather, there are just sporadic
examples of agencies that have already introduced performance management measures and
indicators into their business32. In addition, there were (e.g. Energy Efficiency Agency) and still
there are agencies whose remits refer just to project management, and/or to distribution of
appropriate financial resources obtained from international donors to the parties interested in
conducting projects in a specific area. Although performance indicators might be easily
implemented in such agencies, they have never been introduced and implemented.
Performance management indicators typically include the:
- Extent to which objectives and targets of agency are quantifiable,
31
Many CEE countries have not introduced performance management in a systematic way yet, while
some other countries have introduced it recently (e.g. Ireland).
32
For example, the Business Registry Agency has introduced performance indicators, quality system,
consumers' satisfaction measurement, etc.
Draft Analysis of agencies in the Republic of Serbia — Page 40
- Extent and frequency of reporting and evaluation of the results and goal attainment of an
agency,
- Extent to which political principals provide sanctions and rewards linked with the
performance of an agency, etc.
Although performance management policy options are not the central topic of this study
(improvements in the public administration's management system were subject of analysis of
other projects), we point out that it is rather obvious that at least some performance
management measures and indicators should be introduced as soon as possible. In parallel to
the reorganization of the agencies' landscape, the Government of Serbia should introduce
measures in order to set quantifiable objectives and targets of agencies, regular reporting about
results and achieved goals, sanctions and rewards linked with the performance of agencies, etc.
2.7. Control of agencies
Out of 107 researched agencies, 22 of them are under the auspices of the National Parliament
(all of them are classified as independent regulatory bodies), 2 of them are under the auspices
of the National Parliament and ministry in charge of defense, 25 are under the scrutiny of the
Government, whereas all others are monitored by relevant ministries.
Most of the special organizations are supervised by competent ministries, however, some
special organizations are directly responsible to the Government (e.g. Republic Secretariat for
Legislation, Statistical Office of the Republic of Serbia, Seismological Survey of Serbia, Security
Information Agency). The problem here is that the criteria for special organization to be
supervised by relevant ministry or the Government are not clearly specified in the
legislation. Moreover, when competent ministry supervises specific special organization (article
50 of the Law on Public Administration), it is authorized to monitor how delegated tasks are
performed, point to irregularities, issue instructions and propose concrete measures to the
Government that are necessary to be performed relating to execution of delegated tasks.
Hence, the extent to which this kind of control is effective in practice could be
questioned. Table 8. briefly summarizes key aspects of monitoring and control distinguishing
various types of agencies.
Table 8. Control/reporting of agencies
Type of
agency
Bodies within
Ministries
Governmental
Services
Special
Organizations
Direct control of agencies
Relevant ministry may perform all types of monitoring and supervision prescribed by the
Law on Public Administration of bodies within ministries (including control of tasks
performed, inspection control over the public administration inspection, and all other
sorts of monitoring and supervision).
Director of Governmental service reports to the Government, and Prime Minister (or
Vice Prime Minister) or General Secretary of the Government. Prime Minister (Vice
Prime Minister) has the same authority over director as over competent minister.
General Secretary has same authority over director as minister over body within
ministry.
Relevant ministries do not perform monitoring and supervision of special organizations
necessarily, but rather in the cases when it is prescribed by special law. Even in those
cases, ministries are authorized to ask just for reports and information about special
organization's tasks, to monitor performing the tasks, to point to irregularities, issue
instructions and propose some additional measures to the Government that are
Draft Analysis of agencies in the Republic of Serbia — Page 41
Public
Agencies
Independent
Regulatory
Bodies
necessary to be performed.
Special organizations are obliged to prepare their Annual work plan for the Government,
and report to the Government at least once per year about their activities and tasks.
They are also obliged to send information, explanations and data related to their tasks to
the National Assembly and President of the Republic of Serbia.
Holder of original public powers (competent ministry) may perform all types of
monitoring and supervision over a public agency that is prescribed by the Law on Public
Administration. Ministry under whose auspices public agency performs supervises
regulations that public agency prepares and adopts, as well as its overall day-to-day
performance. Ministry of finance supervises financial resources of public agency and its
spending. Ministry in charge of public administration supervises implementation of public
administration regulation and conducting administrative procedure.
Public agency reports to the relevant ministry on the supervision of other bodies it
executes.
Public agency reports to the founder (the Government) at least once per year on its
activities and prepares financial report. The founder may ask for periodic reports during
the year, if it is in accordance to the statute of a public agency. Founder (the
Government) approves appointments and dismissals of members of public agency's
management board and director, annual work plan, financial plan, public agency's
general act on rights, obligations, responsibilities and salaries of director and
employees, tariffs, etc.
Independent regulatory bodies report mainly to the National Parliament. According to
the Rules of Procedure of the National Parliament ('Official Gazette RS', no. 20/2012),
National Parliament supervises the work of independent regulatory bodies through
review of annual report that they are, by law, required to submit to the National
Parliament.
2.8. Transparency of agencies
As mentioned in the Section 1.1, there are a number of longstanding concerns about agencies
across the countries: why agencies are being established, why so many of them, why they
impose regulatory and bureaucratic constraints to businesses and citizens, etc. At the same
time, they call for justifications and explanations, an increase in efficiency and agencies'
accountability to the government, parliament and citizens, as well as for an increase in general
transparency regarding financing, spending and employees. Degree of independence and the
salary levels payable in agencies have also be questioned.
Agencies in Serbia are not immune to the above mentioned questions. Hence, transparency is
of crucial importance regarding creation, abolition, or any other type of event during the 'life' of
agencies. Moreover, transparency seems to be even more important when it comes to
operations of agencies - especially in terms of 'value for money' they produce. However, in
several occasions and on all of the grounds, transparency of agencies in Serbia has been
undermined (e.g. numerous financial, managerial and personnel, and/or political scandals have
happened). Because of this, the public is generally aware of the existence and operations of
specific agencies. On the other side, it does not know anything about some other agencies,
including the fact that some of them exist.
Draft Analysis of agencies in the Republic of Serbia — Page 42
Box 6. Agencies and transparency issues
-
-
-
-
Non-transparent establishment and annulment of agencies. One of the newest examples was
establishing of the Government Office for Monitoring Presidency of the UN General Assembly
recently. After the media and public pointed out to the fact that setting up and financing of the
Office were not transparent, revealing financial scandal, the Government abolished the Office.
Non-transparent spending of budgetary resources. On the one hand, considerable budgetary
resources were reserved for specific agencies, although they have never started working. For
example, the Mining Agency was established by the Law on Mining in 2006, as a completely new
agency. It has never started working in practice, and the reasons are quite unknown.
Nevertheless, according to the Budget laws for 2008 and 2009, budgetary resources were
reserved for the Mining Agency, but it is not clear whether these resources were spent On the
other hand, it is not clear whether some already established agencies that use budgetary
resources, actually operate in practice. During the research for this study, it was not possible to
determine if some of the existing agencies operate in practice (as they have never responded to
the request for information of public importance, their web sites either do not exist or do not offer
any substantive information, and there are no visible performances of these agencies in relevant
areas (e.g. the Central Registry for Mandatory Social Insurance established in 2010).
Virtual agencies. Some agencies were founded but it is not clear neither why they have not
started operating yet, nor whether and when they will be start working, and if not, why they are
not abolished. Examples are Administration for the Transport of Dangerous Cargo established in
2010 and Ports Management Agency established in 2011.
Non-transparent mission and purpose. For example, Law on Youth envisaged establishment of
the Agency for Youth and Council for Youth. It is not clear why this was necessary (especially
establishing the Agency), when there are regional youth offices in different cities across the
country. Other similar examples possibly include the body that would explore maritime accidents
and conduct safety investigations envisaged by the Law on Maritime Shipping, and independent
aircraft accidents and disaster investigation body (commission) according to the Air Transport
Law.
2.8.1. Transparency in practice
As specified in the Section 1.2., one of the aims of this study was to determine a level of
transparency of agencies in Serbia. The authors of this study sent a request for providing
information of public importance to the sample of 67 agencies by email. 33 All of them were asked
to provide data on the types of revenues and expenditures they have, and how many employees
employed on the basis of the Law on Civil Servants and Appointees and/or employed or
engaged on the basis of the Labor Law.
Overall, 26,42% of contacted agencies that are subject of the analysis have never responded to
the request for information of public importance (Graph 1.). This means that these agencies
directly broke the Law on Free Access to Information of Public Importance. The vast majority of
agencies that provided the data broke the Law in terms of the deadlines for sending out
information of public importance. In addition, one agency rejected the request without stating
any concrete reason.
33
The number of the agencies that were asked to provide data of public importance (67) differs from the
total number of agencies that were analysed in this study (107), because not all relevant agencies were
identified at the time of sending the request, and because it was not possible to find out contact details of
some agencies, so they could not be contacted.
Draft Analysis of agencies in the Republic of Serbia — Page 43
Exactly 11,32% did not provide the data directly, but redirected the authors to the web sites. On
the one hand, those agencies that responded to the request were the most transparent when
giving the information on their personnel. On the other hand, they were more transparent
providing information on revenues, compared to the information on expenditures. Majority of
agencies provided the data by sending it by an email. However, several agencies were much
stricter asking for some additional information on the research and researchers, or for fulfilling
the official request form for information of public importance. This may be regarded as a burden
for getting information of public importance.
Graph 1.34
Source: Data provided under the Law on Free Access to Information of Public Importance
Graph 2.
34
The results are not statistically representative, however, they are indicative in terms of the level of
transparency of the specific group of agencies.
Draft Analysis of agencies in the Republic of Serbia — Page 44
Source: Authors' calculations
2.9. Termination of agencies
Pursuant to the Law on Public Agencies (article 54), a public agency may be abolished if the
rationale for its establishment have ceased to exist or if some other entity is able to fulfill the
purpose of the public agency in a more efficient, effective and cost efficient manner. The founder
(the Government) makes a decision on termination of public agency, on the basis of special
authority given by special law. However, the Law on Public Agencies and Law on Public
Administration do not contain any reference to the assessment and/or underlying methodology
to be used prior to the merger/closure decision. Rather, the Government and parent
ministries have been using their discretionary power to abolish, merge, replace and/or
absorb existing public and other agencies, and to explain closure decisions. So far, no
in-depth analyses of organizational changes of agencies have been done in Serbia.
Parent ministries have been stating only some general reasons in the explanation of legislation
prescribing it.
Draft Analysis of agencies in the Republic of Serbia — Page 45
3. AGENCIFICATION IN SERBIA
This chapter starts with an overview of public administration reforms in Serbia. After that,
possible organizational changes of agencies in Serbia are identified. Finally, agencification
process and the factors that have impacted increasing number of agencies in Serbia are
described and analyzed.
3.1. An overview of Public Administration Reform in the Republic of Serbia
From the democratic turnover in 2001, public administration i.e. state administration system,
including the position and role of the agencies in Serbia, was regulated primarily by the
regulation initiated by the ministry in charge of public administration (Table 9).
Table 9. Ministries in charge of public administration in Serbia
Duration of the Serbian
Relevant ministries in charge of public administration
governments
2001 -2004
Ministry of Public Administration and Local Self-government
2004 - 2007
Ministry of Public Administration and Local Self-government
2007 - 2008
Ministry of Public Administration and Local Self-government
2008 - 2011
Ministry of Public Administration and Local Self-government
Government 2008 - 2011
Ministry of Human and Minority Rights, Public Administration
rationalized
and Local Self-government
2012 - Onwards
Ministry of Justice and Public Administration
Ministry of Regional Development and Self-government
Besides relevant ministries, there were also other public bodies responsible for public
administration reform, such as Civil Service Council, Agency for Public Administration
Development, and Council for Public Administration Reform. The extent to which these bodies
contributed to the reform is rather questionable.35 Also, there was an evident lack of coordination
between these bodies, and between them and the relevant ministry.
Box 7. Some important events relating public administration reform in Serbia
2001 Civil Service Council, Agency for Public Administration Development, and Agency for IT and the
Internet founded
2004 Public Administration Reform Strategy and accompanying Action Plan 2004-2008 adopted and
Council for Public Administration Reform founded
2009 New Council for Public Administration Reform founded
2009 New Action Plan 2009-2012 for Implementation of Public Administration Reform Strategy in the
Republic of Serbia adopted
2012 The Ministry of Finance and Economy proposed the Conclusion relating the necessity for
reviewing existing agencies under the jurisdiction of the ministries to be adopted by the Government.
35
For example, Prime Minister was a chairman of the Council for State Administration. One of the
Council's remits was to issue an opinion on proposals for establishment of new bodies. However, this did
not come to life in practice, amongst others, because the Council engaged people on high positions in the
public administration, leaving little time for performing activities within the Council's remits. Additional
reason why bodies in charge of public administration reform achieved meager results was the fact that
they were operating during the so called 'regulatory tsunami', when enormous number of laws was
adopted and new agencies established, entailing even greater effort, capacities and resources for
supervising the growing number and types of agencies.
Draft Analysis of agencies in the Republic of Serbia — Page 46
Regardless of the increased capacities and available donor assistance for creation and
implementation of the public administration reform in Serbia, it has never been fully
implemented. During the 2001-2004 period, the Government did not succeed in producing an
official strategy for public administration reform. The first Public Administration Reform Strategy
was adopted only in 2004. However, the five-year period provided for implementation proved
unrealistic and there were many implementation obstacles. The reform process has been
prolonged for another four years by adoption of new Action Plan 2009-2012. The component
where public administration reform accomplished significant results is informal civil servants
education36, however, little has been done in terms of improving formal educational programs
related to public administration and public policy at the universities level. Most important of all,
little if anything has been done with regard to the reorganization of overly complex landscape of
agencies.
Lack of comprehensive and systematic reforms enabled further increase in the number of
agencies and para-fiscal charges for businesses and citizens. Namely, there are still a lot
of agencies that are at arms' length from the Government, whereas it is neither clear why
they are and/or should be separate from the state administration apparatus nor are
granted special status in terms of salaries/legal personality/employees. Only few of them
have ceased so far or changed their organizational form coming closer to the
Government.
3.2. 'Mapping' organizational changes within the Serbian public administration
There are two main types of organizational changes within the Serbian public administration that
may affect the agencies.
First type of organizational changes happens as a normal consequence of setting up each
new government. Name of ministries are being changed, as well as their powers and scope of
work. All changes made for this occasion aim at distribution of power between the ministries.
Simultaneously, changes may take place when formation of a new government is accompanied
with specific decisions towards reorganization of state administration apparatus through 'birth',
secession, absorption, splitting, merging, replacement and 'death' of agencies.
For example, according to the previous Law on Ministries ('Official Gazette', 16/2011):
- Ministry of Culture, Media and Information Society absorbed Republic Bureau for Information
Technology and Internet (lately, it became the Directorate for Digital Agenda and was given
the status of a body within the ministry);
- Republic Bureau for Development was integrated into the Ministry of Finance;
- Republic Geomagnetic Bureau was incorporated into the Republic Geodetic Authority.
Second type of organizational changes is linked to a specific decision of the government
aimed at rationalization of the state administration and reduction of the number of agencies that
perform same or similar activities, or outdated functions. Here, public powers, employees and
36
There have been numerous training sessions and education modules for people working in the public
sector, provided through the Governmental Human Resource Management Service with great help of
international donors.
Draft Analysis of agencies in the Republic of Serbia — Page 47
appointees, rights and obligations, assets and archives of abolished/absorbed agency are being
returned to the parent bodies/ministries, transferred to newly established body, or merged with
existing ones.
For example:
- Export Credit and Insurance Agency of the Republic of Serbia (AOFI) absorbed the Serbia and
Montenegro Export Credit Agency (SMECA) in 2005;
- Republic Agency for SME Development and Entrepreneurship was merged with the unit in
charge of managing infrastructural projects and institutional development within the previous
Ministry of Economy and Regional Development, making the National Agency for Regional
Development in 2009;
- Guarantee Fund of the Republic of Serbia was absorbed by the Fund for Development of the
Republic of Serbia;
- Newly established Geological Bureau of the Republic of Serbia incorporated the Geological
Institute of the Republic of Serbia in 2011 on the basis of the law governing mining and
geological research;
- Equity Fund of the Republic of Serbia ceased to exist in 2011, so Privatization Agency
became its legal successor.
3.2.1. Reorganization of agencies and other public bodies in Serbia in 2012
The latest events regarding rationalization of agencies and other public bodies have happened
recently. Once the incumbent Government took office, it opened the debate on the 'agency
model' in Serbia, according to the promises given during the campaign.
In August 2012, the Ministry of Finance and Economy proposed to the ministries to conduct a
review of existing agencies and other public bodies under their remits, proposing those whose
activities are duplicating with others, or have overlapping functions, to be abolished and/or
merged. However, official Government Conclusion has never been adopted, so ministries did
not have official obligation to implement what had been proposed. Moreover, many
controversies have appeared because an unofficial list of agencies that should have been
abolished, reviewed and/or merged showed up in the media. It seemed like, given the lack of will
and/or resources to conduct an in-depth analysis of agencies' landscape, the Government, once
again, was trying to get a feedback from the public by means of the media on the idea to
rationalize agencies.
According to the list published in the media, 20 agencies and other public bodies (such as funds,
public institutions, public enterprises and organizations for mandatory social insurance) were
proposed to be abolished, 6 were proposed to be merged with each other, while 6 were
proposed to be reviewed so that the government can decide on possible form of their
reorganization (see Box 8.). However, there were no criteria suggested that would explain
why agencies listed were proposed for abolition/merging/review. More importantly, none
of the state authorities was appointed or proposed to be a coordinator of the overall
process of rationalization.
Draft Analysis of agencies in the Republic of Serbia — Page 48
Box 8. Agencies and other public bodies proposed to be abolished, merged and reviewed
The following agencies and other public bodies were proposed to be abolished:
- Environmental Protection Agency, Agency for Energy Efficiency, Agency for Accreditation of
Health Care Institutions of Serbia, Serbian Chemicals Agency, Agency for Ionizing Radiation
and Nuclear Safety of the Republic of Serbia, Ports Management Agency, National
Corporation for Tourism Development, Institute for Social Insurance, Center for Study in
Cultural Development, Republic Institute for Social Protection, Directorate for Inland
Waterways 'Plovput', Directorate for Railways, Directorate for the Construction and
Development of the Kolubara Region hit by Earthquake, Environmental Protection Fund,
Indemnity Fund, The Republican Agency for Housing, Games of Chance Administration,
Foreign Exchange Inspectorate, Mining Agency (at that time, this agency did not exist) and
Construction Engineering Directorate (at that time, it could not be determined if this agency
really existed).
Part of the Privatization Agency was marked to be merged with the Republic Directorate for Assets of
the Republic of Serbia and public enterprise DIPOS, while another part of the Privatization Agency
was marked to be merged with the Bankruptcy Supervision Agency. Also, the Institute for
Improvement of Education was marked to be merged with the Institute for Quality Evaluation of
Education.
The following agencies were proposed to be reviewed in order to assess if it is necessary for them to
exist any longer:
- Republic Agency for Peaceful Settlement of Labor Dispute, Medicines and Medical Devices
Agency of Serbia, Road Traffic Safety Agency, Directorate for National Reference
Laboratories, Occupational Safety and Health Directorate, Directorate of Gender Equality.
Source: http://www.politika.rs/rubrike/tema-dana/Drzava-ukida-agencije.sr.html
So far, just four ministries have made some sort of review of the agencies under their aegis.
Namely, the Ministry of Finance and Economy, Ministry of Energy, Development and
Environmental Protection, and Ministry of Foreign and Internal Trade and Telecommunications
prepared changes and amendments to the relevant laws. The National Parliament enacted
these changes and amendments, ensuring abolition of seven agencies. The following agencies
were abolished/absorbed, i.e. ceased to exist as separate bodies:
 Agency for Energy Efficiency;
 Environmental Protection Fund;
 Serbian Chemicals Agency;
 National Corporation for Tourism Development;
 Foreign Exchange Inspectorate, and
 Games of Chance Administration
 Center for Trade Development.37
37
There were some additional announcements of abolishment and merging the existing agencies. Firstly,
pursuant to the Draft Law on Changes and Amendments to the Ionizing Radiation and Nuclear Safety Law
(see:
http://www.ria.gov.rs/misljenja/555/nac/Nacrt%20Zakona%20o%20zastiti%20od%20jonizujucih%20zrace
nja.pdf), it was envisaged that the Agency for Ionizing Radiation and Nuclear Safety of the Republic of
Serbia would be abolished, while the agencies' public powers, employees and appointees, rights and
obligations, assets and archives would be returned to the Ministry or Energy, Development and
Environmental Protection. Also, it was envisaged that the existing public enterprise 'Nuklearni objekti
Srbije' operating in the area of nuclear safety would be abolished, while new special organization would
be established and take-over the public enterprise's tasks, employees and appointees, rights and
obligations, assets and archives. At the end, the National Parliament enacted the Law on changes on the
Ionizing Radiation and Nuclear Safety Law ('Official Gazette', no. 36/2009, 93/2012) without accepting
proposed institutional changes.
Draft Analysis of agencies in the Republic of Serbia — Page 49
More recently, the Ministry of Transport proposed changes and amendments to the relevant law
regulating the status of the Directorate for Inland Waters, and the National Parliament adopted
them. The autonomy of the Directorate for Inland Waters diminished, as it changed its
organizational form from special organization to a body within the ministry.
Explanations of the relevant draft laws pointed to the necessity of public administration
rationalization and increasing accountability of agencies, their inefficiency, inadequate control or
even lack of a possibility to scrutinize and control some of them, etc. The public powers, rights
and obligations, employees and appointees, as well as assets and archives of these agencies
were absorbed by the parent ministries and/or relevant agencies.
3.3. Creation of agencies
The Graph 3. shows that agencies are not completely new phenomenon in the institutional
setting of the Republic of Serbia.
Graph 3.
Source: Authors’ calculations
Total number of agencies identified and presented in the Table 2. in the Section 2.2. is neither
exhausted nor final. However, it is indicative, especially in terms of the years of agencies'
foundation. Firstly, it is obvious that proliferation of agencies happened in the 2000s (Graph 4.).
Secondly, during the public debate in the media, the Minister of Foreign and Internal Trade and
Telecommunications mentioned that the Republic Postal Services Agency would be incorporated into the
Republic
Agency
for
Electronic
Communications
(see:
http://www.rts.rs/page/stories/sr/story/13/Ekonomija/1168486/Ljaji%C4%87%3A+Kontrolisana+poskupljen
ja.html). However, nothing has happened relating to this announcement yet.
Draft Analysis of agencies in the Republic of Serbia — Page 50
Secondly, it could be concluded that greatest number of agencies that exist today was
established after 2004.
Graph 4.38
Source: Authors’ calculations
Agencification in Serbia actually started in 2001. A couple of months after taking office in
2001, the first democratic Government of the Republic of Serbia set up three new bodies to be
in charge of public administration reform - the Civil Service Council, the Agency for IT and the
Internet, and the Agency for Public Administration Development. All of these three bodies were
reporting directly to the Government.
Box 9. Bodies in charge of public administration reform at the beginning of 2000s
The Civil Service Council was established to act as an expert advisory committee for the Government,
design a reform program, propose measures for improving the civil service, and coordinate the work of
ministries related to civil service development.39 The Agency for IT and the Internet was established as a
professional service of the Government. The Agency for Public Administration Development was
established as an independent body to elaborate and propose program for the enhanced efficiency and
quality of the work in the public administration, monitor their realization and provide professional
assistance, carry out educational program, coordinate between core ministries, agencies and other public
bodies, and discharge other activities at the request of the Government of the ministries. Also, the Agency
was envisaged to exist for certain period of time, until the prerequisites for effective public administration
are established. This agency was financed mostly by international donors, whereas international experts
were providing counseling services regarding public administration reform to the Government.
38
For the purpose of the Graph 4., we took into account years when agencies were established in their
current organizational form.
39
Lately, in 2003, it was widely held that the Civil Service Council was not functioning according to the
expectations. Therefore, the Ministry of Public Administration proposed replacing the Council with a new
advisory body, a Council for Public Administration Reform chaired by the Prime Minister. This body was
commissioned to develop a strategy for administrative reform, which in turn would be the basis for new
civil service legislation.
Draft Analysis of agencies in the Republic of Serbia — Page 51
Moreover, the first democratic Prime Minister of the Republic of Serbia was advocating an
idea of establishing 30 small agencies that would perform necessary activities more
efficiently than core state administration bodies within the ministries. 40 Establishment of
agencies outside the ministries was one of the major organizational innovations of then
Government, and was the result of distrust of the public administration structure. In addition to
the Agency for Public Administration Development, the Civil Service Council and the Agency for
IT and the Internet, around 20 agencies responsible for foreign investment, the development of
small and medium-sized enterprises, the management of diaspora relations, social welfare,
health promotion, river navigation, and EU-alignment of national legislation were created.
The main partner in pursuing the idea of agencification in Serbia was a Norwegian expert
group that produced a serious of studies on the Serbian public administration in cooperation
with the Agency for Public Administration Development. Two main recommendations of this
group were to:
- Organize those spheres of activity where direct political control was neither necessary
nor desirable, as a directorate and place them administratively outside the competent
ministry. The directorates (agencies) should have been allowed to deal with their tasks
with a certain degree of administrative independence, under the Government/competent
minister who ultimately had the political responsibility for the activity, and
- Review the activities of then special organizations that were directly under the
Government, place them administratively under the relevant ministries and give them a
status of a directorate.
In this way, general tendency of transferring decision-making from ministries to agencies
enjoying independence to a greater of lesser degree was 'imported' to Serbia from
developed country such as Norway. This policy transfer happened regardless of the fact
that Norway, as other Scandinavian countries, has a long tradition in providing public
services to citizens through agencies (unlike CEE and Balkan countries).
Immediately after the democratic turn-over in 2000, serious reform of public sector organizations
was necessary, and that was an excellent chance for putting in order overall public
administration. Nevertheless, well-conceived and seriously planned reorganization of then
administrative structure with aim of curtailing duplicated and/or unnecessary agencies
and other public bodies did not happen. It was also widely held that the institutions
immediately responsible for public administration reform did not produce synergies. 41 What is
more, in 2004, public authorities also ascertained that little was done in this area, as there were
still agencies and other public bodies with same jurisdictions.42
40
http://www.b92.net/info/vesti/index.php?yyyy=2001&mm=02&dd=24&nav_category=1&nav_id=21564
Eriksen, S. and Solumsmoen, D. (2005) Unfinished Transition: Serbian Public Administration Reform
2001-2004, Belgrade
41
42
http://www.srbija.gov.rs/vesti/vest.php?pf=1&id=25690&url=%2Fvesti%2Fvest.php%3Fpf%3D1%26id%3
D25690
Draft Analysis of agencies in the Republic of Serbia — Page 52
Box 10. IIl-conceived Public Administration Reform
'...adequate attention may not always have been given to how various measures would affect each other.
For example, as regards reforms in the public administration, the responsibility is divided between four
bodies: the Agency for Public Administration Development, the IT and Internet Agency, the Council for
Public Administration, and the Ministry of Public Administration and Local Self-government. There does
not seem to be any carefully considered division of labor between these four bodies. On the contrary, the
tendency - even within the various ministries - seems to be to establish new bodies on an ad-hoc basis,
outside and in addition to the existing administrative structure, rather than to restructure and adapt it. The
result is a more complex administrative structure, not a simpler one. The lack of a general overview and
an overall plan creates problems for those working inside the system and for Serbia's external
cooperation partners. For example, it may be difficult for the Serbian Government to benefit adequately
from the contributions from the various donor countries, at the same time as the latter may be somewhat
hesitant about further cooperation if the overriding impression is that there is too little coordination.'
Source: Agency for Public Administration Development (2002) The Serbian central government
administration: Organizational challenges - Impressions and recommendations from the Norwegian expert
group, p.109.
3.3.1. The waves of agencification (proliferation of agencies) in Serbia
It could be said that there were two waves of agencification: from 2001-2005 and from
2008-2012. However, the greatest number of agencies was created during the second wave of
agencification, during the mandate of the previous government when 38 agencies were
established.
However, not all of the agencies were completely new. The data used in the Graph 4. concerns
year of establishment of the agencies in its current status and organizational form. This is to say
that many of them have their legal predecessors, that is organizations that have been carrying
out same or similar tasks before they were re(labeled) as agencies. The data presented in the
Graph 3. is therefore fixed in time, and overestimates the recentness of agencification reforms.
Agencies in Serbia change organizational form as in other countries, but this could not be
accounted for in this Graph. Rather, Annex 5. shows which agencies included in the Graph 3.
have their legal predecessor. Here, situation is quite similar to the one in the CEE countries, as
many organizations that are nowadays considered to be agencies in the CEE countries had their
forerunners established either before or during communism.43
With respect to the creation of independent regulatory bodies, it is interesting to point out that
just 344 out of 25 independent regulatory bodies in Serbia were established prior to 2000s
(Graph 5.). Excessive establishment of independent regulatory bodies after 2000 coincides with
the aspiration of the Serbian Governments towards EU membership, as the EU asks explicitly
more regulatory and control tasks to be performed. This trend in Serbia and in many CEE
countries corresponds positively.
Graph 5.
43
Van Thiel, S., Verhoest, K., Bouckaert, G. and Lægreid, P. (2011) Lessons and recommendations for
the practice of agencification (eds.), in Van Thiel, S., Verhoest, K., Bouckaert, G. and Lægreid, P. (eds.)
Government Agencies: Practices and lessons from 30 countries, Palgrave Macmillan, p. 415.
44
Independent regulatory bodies established prior to 2000 are National Bank of Serbia, Public Attorney's
Office of the Republic of Serbia, and Securities Commission.
Draft Analysis of agencies in the Republic of Serbia — Page 53
Source: Authors’ calculations
3.4. Explaining agencification in Serbia
There are several reasons for proliferation (i.e. increasing number) of agencies in Serbia. First,
as stated in Section 3.3, a side effect of donors’ assistance was policy transfer that happened
due to a large number of international experts coming to Serbia advocating agency
models used in their own countries. These models were often based on the
establishment of new agencies, or structural disaggregation of existing units from the
central government. However, donors have not always been sufficiently responsive to local
traditions, and there were examples of donors committing themselves to models ill-suited to the
Serbian context.45 Similarly, international donors preferred setting up new agencies (for example
in the area of energy and energy efficiency, see Box 11.) that would manage and distribute
donor's financial help, in order to control money spending in a more efficient way.46
Box 11. Financial help of international donors for establishing new agency in Serbia
The Serbian Energy Efficiency Agency (SEEA) was founded in 2002 with the financial support of:
 EU (EAR - CARDS 2002 (2002-2006)) of €5M (€3.75 M for programs - Demonstration
Projects and Grant for running costs of SEEA (continue till May 2008))
 Kingdom of Norway (2002-2007) (Technical and financial assistance to the Ministry of Mining
and Energy and SEEA for institutional and capacity buildings, about €300.000 annually)
 Kingdom of Spain (2007-2010) (Technical and financial assistance for use of wind energy in
Serbia, €204.000 measurement and feasibility study for wind farm, Technical and financial
assistance for use of solar energy in Serbia, Demonstration Project and Study of the Solar
Energy Potential)
 World Bank (Energy Efficiency Project in Serbia), IDA credit and IBRD loan (2004-2012) ($25
M + $30 M)
This agency was also financed from other financial sources such as commercial loans and loans
obtained from international financial institutions. Finally, the Serbian Energy Efficiency Agency's
running costs and energy efficiency and renewable energy use projects were financed by the state
budget of the Republic of Serbia.
Source: http://ec.europa.eu/dgs/jrc/downloads/20090629_infoday_belgrade_lilic_dimitrije.pdf
45
Eriksen, S. and Solumsmoen, D. (2005) Unfinished Transition: Serbian Public Administration Reform
2001-2004, Belgrade
46
Nevertheless, it could not be said that donor contributions were sufficiently coordinated and that there
were no overlap and duplication of effort.
Draft Analysis of agencies in the Republic of Serbia — Page 54
Secondly, as in many new member states, acceding and candidate countries, path of EU
accession and necessary harmonization of national legislation with the Acquis has
speeded up proliferation of agencies in Serbia as well. Namely, the EU often requires
establishing and conducting new functions by the institutional/administrative structure that would
enable complying with the EU legislation, although it does not prescribe exact organizational
form that has to perform these new functions. Rather, EU leaves the decision up to the countries
themselves on which bodies will perform the tasks needed (existing or new once, centralized or
decentralized) (this will be discussed in detail later on in the Subsection 4.4.4.). However, this
fact was often neglected in the countries mentioned above, and in Serbia as well. Namely, it is
always more likely that new agency at arms' length from the Government will be set up for
conducting required tasks, than the opportunity to assign specific task to the existing bodies will
be used.
This has been happening primarily because of a general strategic orientation of the Serbian
governments from 2001 onwards to harmonize Serbian legislation to the EU legislation in all
possible areas. Consequences of this were the following:
- EU directives have been often transposed into the new legislation in Serbia
without careful adopting it to the existing circumstances in relevant areas;
- Policy makers have been often formulating recommendations from the EU
directives in a way that prescribes introduction of new bodies. This has been
occurring very often for political reasons, since it enables politicians and those
around them to benefit from it (e.g. in terms of employment of political associates
in agencies and other public bodies);
- Civil servants taking part in the creation of legislation in the Serbian state
administration often transpose EU directives 'word for word', without full
understanding of EU directives and/or possible consequences of such actions,
and
- Civil servants themselves sometimes understand EU recommendations as EU
requirements, arguing that the EU requires establishment of new bodies that have
to be structurally/functionally disaggregated from the central Government.
Thirdly, international obligations are also an excuse for proliferation of agencies in Serbia.
Being a party to a multilateral treaty results in the obligation to set up the specialized
organizational units endowed with specific powers. This is often the case in some technical
fields (e.g. civil aviation, meteorology), or civil rights and environmental field. However, countries
being a party to multilateral treaties still have freedom to choose which organizational structure
will perform specific tasks, as international agreements rarely prescribe specific organizational
form as required to execute the tasks, or establishment of a completely new agency. One of the
most illustrative examples in Serbia is the Agency for Ionizing Radiation and Nuclear Safety of
the Republic of Serbia, established to respond to international obligations of the Republic of
Serbia. It could have been set up as a body within the ministry in charge of environmental
protection, however, policy makers decided to create it as a separate agency that is structurally
disaggregated from the central Government (Box 16.).
As already discussed, Serbian agencies often use the opportunity to employ people on
the basis of the Labor Law. Being employed under the Labor Law, provides somewhat
privileged status compared those employed under the Civil Service Law (primarily because
Draft Analysis of agencies in the Republic of Serbia — Page 55
salaries of the former group of employees are not governed and limited by the Law on Salaries
of Civil Servants and Appointees, hence not limited to the amount of civil servants' salaries).
Political benefits from employing people in the public sector with relatively high salaries,
provide significant incentives for the establishment of new agencies or structural
disaggregation of ministerial sectors/units/departments from the Government.
Finally, it should be kept in mind that the Republic of Serbia is the only country having
continuity compared to all other ex-Yugoslav countries with basic state structures
(including agencies) that were already in place. This made it difficult for the Serbian
governments to reorganize its administrative system from scratch, while all other countries had a
chance to build up completely new governmental functions and institutions and/or reorganize
existing once following the separation. In Serbia, as in Hungary and Romania (compared to, for
example, Croatia, Estonia, Lithuania and Slovakia), the development of agencies was more
path-dependent on the previous institutional design. This is so as it was neither always possible
nor desirable to abolish existing agencies because they were already settled down (for the
comparison between agencification in Serbia and Croatia, see Graph 7.). Moreover, the transfer
of functions from the State Union of Serbia and Montenegro to the republics in 2003 placed a
heavy workload on several ministries, particularly the Ministry of Public Administration, which
had to adapt civil service legislation and other general administrative arrangements to the new
federal system. It was assessed as the best option to take over all the civil servants working in
the public sector in order to enable continuity of the country. These changes impeded rather
than promoted reform efforts, deflecting the attention of the government from the necessary
reform of public administration. Finally, after the disintegration of the Federal Republic of
Yugoslavia, 'brain-drain' of a good federal-level cadre come about and reduced full potential of
Serbia as a separate country for upcoming, necessary reforms.
Draft Analysis of agencies in the Republic of Serbia — Page 56
4. INTERNATIONAL EXPERIENCES WITH AGENCIFICATION AND
DEAGENCIFICATION
4.1. Definition of agency
Although there is a lack of a uniform definition of the term ‘agency’, a consensus has grown that
an 'agency' concerns an organization that is:
- Structurally disaggregated from the central government, i.e. have higher degree of
autonomy compared to departments/sectors/units within ministries (they have separate
organizational structure, own name, separate account, and are given a single or small
set of functions, while there is a legal framework which sets out its purpose, powers,
governance and reporting arrangements), and
- Operates under more business-like conditions than the governmental
bureaucracy.
Agencies are also called quasi-autonomous non-governmental organizations (quangos),
semi-autonomous public bodies, arms-length bodies, non-departmental public bodies,
independent administrative bodies, unelected bodies.
Box 12. Different usage of the term 'agency'
In the United Kingdom, and to a large extent in English-speaking Commonwealth countries, the use of
the term 'agency' has become fashionable as a general concept applying to organizational structures of
the state administration that are supposed to have some degree of autonomy (that are 'at arm’s length'
from the minister), and differ from the 'traditional' hierarchy of a ministerial department. Recently a
distinction between
- 'executive agencies' (departmental business units for which ministers are directly accountable but
which are separate from the central department for administrative reasons - more like Serbian bodies
within the ministries) and
- 'non-departmental public bodies' (bodies which have a role in the processes of national government,
but are not government departments or part of one, and which accordingly operates to a greater or lesser
extent at arm’s length from ministers - more like Serbian public agencies) has gained ground.
In the United States, however, especially at the level of the federal government, the term 'agency' is used
for all types of administrations.
There are different types of agencies across the EU countries, at varying distance from
the government, with varying (legal) forms and varying degrees of autonomy. Some
agencies may have legal independence (legal personality) and others not. Some agencies are
based on private law rather than public law. Some agencies raise their own revenues while
others depend entirely on the government funding. Some agencies employ merely civil servants,
while others employ civil servants and people with labor contracts, etc. These differences are
reflected in the number of different types of agencies in the EU and other countries,
ranging from, for example, the non-departmental public bodies and 'Next Steps' agencies47 in
the UK, ZBOs in the Netherlands, statutory authorities in Australia, public establishments in
France, Italy and Portugal, different types of executive and/or contract agencies in the
Scandinavian countries and Belgium, to so-called bureaus and boards in Eastern European
countries.
47
'Next Steps Initiative' was the first initiative in the UK pursuing the idea of improving management in the UK
Government through creating executive agencies that would deliver services more efficiently and effectively than the
governmental departments. Thus, agencies in the UK are often called 'Next Steps Agencies'.
Draft Analysis of agencies in the Republic of Serbia — Page 57
4.2. Executive and/or regulatory agencies
Majority of agencies carry out more than one task - regulatory and/or executive tasks (such as
service delivery and policy implementation).48 Executive agencies execute policy, which
distinguishes them from ministries which make policy. Across EU countries, agencies are in
charge of areas such as health and safety, environment, etc. They are likely to share similar
characteristics across countries, including a high degree of independence (often enforced
through a legal act setting them up as a separate legal entity), and own-source resources
separate from the budget of the executive power. In this regard, Serbia does not differ a lot from
other countries.
On the other hand, in most countries, there is no single framework approach to regulatory
agencies. Key elements in their design are likely to vary across agencies, including:
- Extent of their independence from the central executive (ministries);
- Accountability mechanisms (for example, they may be accountable to parliament or to
the central executive, or to both), and
- Extent and nature of their powers (to make regulations, to enforce regulations, to take
decisions on individual cases, to impose sanctions etc).
However, it is often hard to clearly divide them into the one or another category as in the state
administration systems (especially in Eastern European countries) one can find a range of
different agencies performing both regulatory and executive tasks.
Nevertheless, some common denominators regarding extent of independence and power of
regulatory
agencies
could
be
found
in
the
EU
requirements
that
membership/accessing/candidate countries have to comply with in some areas. At the same
time, these are almost the only requirements relating administrative structures that EU
asks from member and candidate countries.49 Namely, regulatory independent
bodies/authorities should be independent of different stakeholders operating in the specific area
such as lobbying groups, service providers, operators, etc. In addition, in some cases (in the
case of areas such as competition protection, telecommunications and postal services, energy,
standardization and accreditation, etc.), competent regulatory bodies should be independent of
any remaining governmental interest as a shareholder and/or direct political control (i.e.
independent of executive, judicial and legislative powers), with sufficient resources allocated to
them.
4.3. Categorization of agencies
There is an absence of clear legal typologies for agencies across the countries. This is because
there is a range of different (hybrid) agencies that could be hardly placed into the existing
48
In Serbia, Tomic (2008) differentiates "administrative" (upravne) and "public" (javne) agencies with
special role and importance of independent regulatory agencies.
49
EC (2005) Guide to the Main Administrative Structures Required for Implementing the Acquis - Informal Working
Document tor Guidance Only
Draft Analysis of agencies in the Republic of Serbia — Page 58
categories. Nevertheless, majority of existing classifications is made according to agencies'
degree of autonomy.
One of the most comprehensive classifications is the following and includes five categories50:
1. National/central/federal unit such as a ministry, department, ministerial
directorate/directorate general, state institution;
2. Semi-autonomous organization/unit/body, with no legal independence but some
managerial autonomy. This category includes specialized organizations and
organizational units within the government and state administration, performing public
tasks at the central level. Not having legal personality, they are subjected to the legal
framework of central state administration with regard to their internal organization,
personnel (recruitment, civil service salaries) and financial management, facing strong
political control (e.g. Next Steps Agencies (UK), contract agencies (Netherlands and
Belgium), central agencies (Scandinavian countries), Agenzia (Italy), Estonian boards,
Serbian bodies within ministries and special organizations);
3. Legally independent organization/body (based on statutes) (statutory bodies) with
managerial autonomy, either based on public law or private law. These are considered
as the 'regular' type of agencies (e.g. public establishments (Italy), ZBO (Netherlands),
NDPB (UK), Parastatalen (Belgium), statutory bodies (not corporations, Austria,
Estonia), Serbian public agencies);
4. Private or private law based organizations established by/on behalf of the
government like a foundation or corporation/company/enterprise (e.g. state-owned
companies/enterprises, governmental foundations). Government has to be majority
shareholder in case of companies. Typical process through which these organizations
are created is privatization (for example, national airports and railways are state-owned
corporations in many countries).
5. Execution of tasks by regional or local bodies and/or governments (county, province,
region, municipality). Typical process that enables creation of these organizations is
decentralization (for example, in many countries hospitals, police, universities and
housing companies operate at sub-national level, either through local governments or as
autonomous body).
6. Other, not listed above (including contracting-out to private companies and privatization
with government no longer being majority shareholder).
Legally independent organizations/bodies (statutory bodies) were more popular than semiautonomous organizations without legal independence until the 1990s in developed countries,
and until the 2000s in transition countries, but since then the number of semi-autonomous
agencies without legal independence has increased much more stronger than the number of
statutory agencies.51 It has happened partly due governments' response to concerns about
democratic deficits and inability to control effectively (performances of) statutory bodies. As a
result, nowadays governments across countries prefer agencies with fewer degrees of
autonomy and try to keep executive agencies closer to the government than before. However,
there are no indications that they create lesser agencies on the whole. 52
50
Van Thiel, S.and CRIPO team (2009) The rise of executive agencies: comparing 25 public tasks in 15 European
countries, Paper to be presented at EGPA conference, 2-5 September 2009, Malta.
51
Ibid.
52
Ibid.
Draft Analysis of agencies in the Republic of Serbia — Page 59
4.4. Agencification - Proliferation of agencies
Agencification refers to the creation of public sector organizations that operate at arms'
length from the government, responsible for policy implementation (i.e. to carry out
public tasks such as regulation, control tasks, policy implementation, service delivery) in
a relatively autonomous way, ensuring less hierarchical and political influence on their
daily operations, and more managerial freedoms. Agencification is also well known as
'delegation' or 'devolution' of public powers. It means an expansion in the number of
agencies through their establishment, secession and/or split.
4.4.1. Waves of agencification
Three ways of agencification in the international context have happened so far. The first
one occurred under the influence of the New Public Management (NPM) doctrine. The NPM
comprised a range of reforms that most (western) governments have been implementing since
the 1980s (e.g. creation of agencies, introduction of indicators of public sector performance). It
was advocating the so called 'ideal-type agency' model.53 This model advocated that structural
disaggregation of governments'/ministries' units into agencies, with high levels of managerial
autonomy, ex-post and results-based control and steering, as well as private sector-style
internal management, would enhance the performance of public sector organizations. It was
claimed that separation of policy making and policy implementation would reduce interference
by politicians, because politicians and agencies are able to focus on their core tasks - policy
development and policy execution, respectively.
Many governments in transitional and developing countries (especially CEE countries)
have taken the ideal-type agency model as a blueprint from 1990s on, copying the model
into their own public sector without adapting it to local circumstances and traditions. 54
This has led to implementation problems, because the new organizations do not entirely
fit with the existing institutions and practices.
Box 13. NPM ideal-type agency model
Firstly, it is characterized by high levels of managerial autonomy, particularly regarding personnel and/or
financial management. The central argument for more managerial autonomy is that it increases agency
efficiency, effectiveness and accountability by placing direct responsibility on the agency itself. Developed
countries (such as UK and Australia) and Scandinavian countries are, for example, more inclined to grant
higher levels of autonomy to their agencies.
53
International comparative research shows that agencies governed according to the NPM model are
very hard to find in practice, because government regularly adapt this agency model to political and
administrative settings of their countries when they transfer it (see Verhoest et al., 2010). However,
generally speaking, it could be said that agency models in Anglo-Saxon and Scandinavian countries are
the most similar to the ideal-type agency model (see, Van Thiel et al.; 2011a).
54
Van Thiel, S., Verhoest, K., Bouckaert, G. and Laegreid, P. (2011) Lessons and recommendations for
the practice of agencification (eds.), in Van Thiel, S., Verhoest, K., Bouckaert, G. and Laegreid, P. (eds.)
Government Agencies: Practices and lessons from 30 countries, Palgrave Macmillan, p. 415.
Draft Analysis of agencies in the Republic of Serbia — Page 60
Secondly, the NPM ideal-type agency model advocates limiting the policy autonomy of agencies, by
setting a strict division between policy design by the parent ministry and implementation by agencies, in
order to enhance specialization and to avoid agencies designing the same policies they have to
implement (UK, New Zealand, Denmark, the Netherlands).
Finally, the NPM ideal-type agency model stresses that control of public organizations should shift from
the use of traditional ex-ante and input oriented controls (extensive rules and regulations, requirements for
prior approval, legality and compliance-oriented oversight)55 to more ex-post and results-oriented control
mechanisms (formulation of result objectives and targets, monitoring and evaluation of these targets,
56
results-based sanctions) , in order to combine managerial flexibility with responsibility for results. By
relaxing controls on inputs and procedures, agencies are freed from cumbersome regulations, which
hamper the efficient use of resources and effective organization of processes. Instead, agencies are set
clear organizational goals, targets and indicators of organizational success, which are monitored,
evaluated and eventually sanctioned by political and administrative principals. 57
Nevertheless, in many countries ex-ante and input-oriented forms of steering and control are still
predominantly and most often used (e.g. experiences in Estonia and Lithuania, functional oversight in
Germany), at least formally. Ex-post and results-based steering is still neither widespread, nor well
developed in most countries. In such incomplete systems, the formulation and evaluation of objectives
and targets is done by the agency itself, and/or performance indicators are absent or of poor quality (e.g.
United Kingdom and most Scandinavian countries are exceptions, although in the latter, sanctions are not
really applied).
The second wave of agencification happened due to the liberalization, decentralization and
privatization agendas of recent decades. These processes were reason for a global
explosion in the number and types of functions that governments were prepared to undertake,
and consequently for an expansion in the number and types of agencies.
Finally, the third way of agencification is most noticeable in the CEE and Balkan countries
because of the influence of EU accession negotiations upon these countries. This wave of
agencification will be discussed in more detail in the Subsections 4.4.3 and 4.4.4.
4.4.2. Overview of agencification across different group of countries
A number of CEE countries have experienced extensive proliferation of agencies - Hungary in
1980s, Lithuania in 1990s, Estonia during 1990s and 2000s, and more recently Romania during
2000s. In the last previous years, CEE countries charged more tasks to agencies on
average (with the exception of Hungary) than most other countries. 58 More specifically, in
2009, 63% of 25 tasks were agencified, 14% of them were privatized, while there were but
few tasks left to governments itself.59 The semi-autonomous agencies without legal
55
The grounds for which the agency is held accountable in the case of ex ante control are rule
compliance, fairness, equity and integrity.
56
The grounds for which the agency is held accountable in the case of ex post control are efficiency,
effectiveness, responsiveness and overall performance.
57
The shift from ex ante to ex post control based on contractual instruments are advocated by, for
example, Verhoest et al. (2004) and Christensen and Lægreid (2007)
58
Randma-Liiv, T., Nakrosis, V., and Gyorgy, H., (2011) 'Public sector organization in Central and Eastern
Europe: From agencification to deagencification, Transylvanian Review of Administrative Sciences,
Special Issue November, p. 167.
59
Van Thiel, S. and CRIPO team (2009) The rise of executive agencies: comparing 25 public tasks in 15
European countries, Paper to be presented at EGPA conference, 2-5 September 2009, Malta.
Draft Analysis of agencies in the Republic of Serbia — Page 61
independence were the preferred form in CEE countries for the executive tasks in the areas of
security, payments, registration, education and information, social care and infrastructure –
particularly in Estonia, Lithuania and Hungary, with Romania being more differentiated across
the different categories of agencies.
In fact, the pace of reform in the CEE countries has overtaken the reforms in Anglo-Saxon
countries (UK, Ireland, Australia and New Zealand) that used to be the most prominent
reformers. These two groups of countries differ in at least two aspects. Firstly, CEE countries
are characterized by the comparatively recent nature of agencification. Secondly, motives
for proliferation of agencies were different. Namely, in Anglo-American countries creation of
agencies was one of the most significant parts of NPM deregulatory reform agenda, while in the
case of majority of the CEE countries, the number of agencies increased substantially during the
EU accession period.60 Nevertheless, there are no significant differences between countries'
choices about which tasks are charged to agencies between the two groups of countries. 61
Agencification reforms in transitional countries have taken place in a unique context (vis a vis
legal characteristics and a redefinition of the role of the state), at a very high speed (e.g. Latvia,
Estonia, Slovakia), with a larger scope than in most OECD countries, and with much less
funding and 'reform capacity'. Under the communist regime, many agencies already had legal
personality. Since Serbia and CEE countries share similar political and administrative
background in terms of the socialist regime, abovementioned trend could explain to some extent
why there are many agencies with legal personality in Serbia. Agencification in transitional
countries therefore refers not so much to granting legal autonomy, but to financial and
personnel autonomy, and to changes in the management of these organizations (more
business-like). Still, agencies in most CEE countries (e.g. Estonia, Hungary, Lithuania,
Romania, Slovakia, and Croatia)62, enjoy high degree of formal autonomy from the executive
government.
Unlike the CEE countries, Scandinavian countries (Denmark, Finland, Sweden and Norway)
have a longstanding tradition in creating agencies and providing services to citizens through
agencies, while their governments tend to be small. Recent reforms in these countries are
therefore less focused on reducing or increasing the number of agencies, but more on reforming
the existing agencies and the conditions under which they operate (e.g. by splitting up multipurpose agencies into single purpose organizations, or by making their management more
business-like by using e.g. performance measurement techniques). This strategy is very
different from, for example, Southern European countries, with comprehensive reform programs
led by strong central governments which favor corporatization (creation of companies) and
decentralization (delegation to local and regional governments) over creation of agencies.
4.4.3. Agencification in the CEE countries and its drivers
60
Ibid.
Van Thiel, S., Comparing agencification in Central Eastern European and Western European countries:
Fundamentally alike an unimportant respects?, Transylvanian Review of Administrative Sciences, Special
Issue.
62
Randma-Liiv, T., Nakrosis, V. and Gyorgy H. Public sector organization in Central and Eastern Europe:
From agencification to deagencification
61
Draft Analysis of agencies in the Republic of Serbia — Page 62
It has been argued that shared history of post-communist transition as well as influences of the
EU accession take the CEE countries through a number of similar developments, offering them
similar opportunities and exposing them to similar problems. Given Serbia's political history
and tradition, as well as Serbian legal and administrative system that was quite similar to
the systems in the CEE countries, Serbia may be compared to the group of transitional
countries regarding processes of proliferation and rationalization of agencies. Namely, all
of the reasons for proliferation of agencies in the transitional countries could be
recognized in Serbia as well.
The 'agency agenda' in the sense that Western countries pursued it, has been absent in most
CEE countries63, Serbia and other Balkan countries. In Western countries, 'agency agenda'
meant to be a systematic conceptual framework for decentralization of decision making power
through creation of agencies, as well as for separation of policy implementation from policy
making. On the contrary, in the CEE and Balkan countries, agencification was not a
prominent part of the public administration policy agenda as a potential way of reducing
centralized power. It was not the result of methodical design, but rather the outcome of
improvisations, traditions and political factors. The tendency seems to have been to establish
new bodies outside and in addition to the existing administrative structure, rather than to
reorganize and adapt it.
Box 14. Public administration reform in the Balkans
Public administration reform efforts in the Balkans have been bedeviled by the lack of a strategic vision
and by attempts to introduce NPM ideas in the contexts where basic administrative functions and values
have not been fully established. This was so partly because of the lack of political and administrative
capacity, but also due to the speed with which the creation of agencies was undertaken. 64
In Croatia, for example, legislation that promotes the agency model as a new type of institutional form in
the administrative, legal and political system still does not exist. In Serbia, at the beginning of the public
administration reform process, there was no carefully considered division of responsibility between the
state authorities in charge of public administration reform. As a consequence, fragmented patterns of
organization have made it difficult to achieve a coordinated approach to administrative reform, as well as
to avoid the duplication of efforts and conflicts of competencies.
All this, as well as the fact that there was not a dramatic break with the communist past, but a
natural outgrowth of this past, made it difficult for the CEE and Balkan governments to
systematically analyze potential negative effects of proliferation of agencies, and monitor and
control agencies. Also, little has been done regarding introduction of public sector performance
indicators. Rather, proliferation of agencies led to the ad hoc and sectoral development of
agencies (as also happened in Estonia, Hungary, Lithuania, Romania and Slovakia) 65. It has
only been in the past few years that a few CEE governments like Lithuania and Romania
63
Randma-Liiv, T., Nakrosis, V., and Gyorgy, H., (2011) 'Public Sector Organization in Central and
Eastern Europe: from Agencification to de-Agencification, Transylvanian Review of Administrative
Sciences, Special Issue November, p. 160-175.
64
OECD, SIGMA, EU (2001) Public Administration in the Balkans: Overview
65
Randma-Liiv, T., Nakrosis, V., and Gyorgy, H., (2011) 'Public Sector Organization in Central and
Eastern Europe: from Agencification to de-Agencification, Transylvanian Review of Administrative
Sciences, Special Issue November, p. 160-175.
Draft Analysis of agencies in the Republic of Serbia — Page 63
have started developing government-wide reforms of public sector organizations, which
refers mainly to processes of rationalization of the agency landscape.66
There are several important reasons why proliferation of agencies has happened in
transitional countries:
- Implications of EU accession - Governments of the acceding and candidate countries
have a hard time balancing EU requirements concerning performing new and restructuring old
governmental functions that enable harmonization with the Acquis. The EU 'conditionality' in
public administration development was particularly emphasized during the Eastern enlargement
in 2004 (countries: Czech Republic, Poland, Slovakia, Hungary, Latvia, Lithuania, Estonia,
Cyprus, Malta, and Slovenia) and 2007 (countries: Romania and Bulgaria). These countries had
to systematically demonstrate the presence of the administrative capacity and ability to
effectively apply the Acquis, hence for the first time, an evaluation of administrative systems of
candidate countries, was applied.67 The CEE countries were correct to evaluate all
administrative reforms in the light of accession requirements. Although there is no convincing
evidence that EU requires from the governments to create new separate agencies and
fragment the existing state structure, the CEE countries rather created a number of new
agencies, instead to reform, strengthen and build the existing administrative and
institutional capacities.
- Responding to international obligations and balancing requirements and
recommendations of international donors - As in the Serbian case, the CEE governments
had to balance the requirements and recommendations of international donor organizations.
Many agencies have been established by the help of international donors (especially EU),
driving public administration reform towards 'agencification'.68 Advises of international
consultants from developed countries were often aimed at introducing the idea of agencification,
recommending experiences of their home countries, with less attention paid to the local
circumstances of the countries they consult. This has led to a 'West-East' policy transfer
regarding agencification, including the development of tools such as contracting out.
- Agencification instead of capacity building - Agencification has been regarded as
a replacement for state capacity building. Instead of substantive democratic institutionbuilding that would enable dealing with reforms coming as an inevitable result of EU accession,
in transitional countries agencification came first, regardless of the fact that without state
capacity there is little to put at arms' length, while competency to steer or control agencies is
insufficient.69 The establishment of new governmental functions and/or restructuring of old
functions inherited from the communist past led to the proliferation of agencies (especially in
Croatia and Estonia), aiming at relaxation of the centralized and rigid communist
administrations.
66
Ibid.
Meyer-Sahling, J.H. and Yesilkagit, K. (2011) 'Differential legacy effects: Three propositions of the
impact of administrative traditions on public administration reform in Europe East and West', Journal of
European Public Policy
68
OECD, SIGMA, EU (2001) Public Administration in the Balkans: Overview
69
Van Thiel, S.and CRIPO team (2009) The rise of executive agencies: Comparing the agencification of
25 tasks in 21 countries, Paper presented at EGPA conference, Malta, September 2-5
67
Draft Analysis of agencies in the Republic of Serbia — Page 64
- Politics - Creation of agencies, but also their reorganization and abolition, involve
inherently political elements. It may imply new patterns of how authority and influence,
resources, benefits and costs are distributed among key actors within and outside the
government. Politicization of agencies is reported from Croatia and Slovakia, and Hungary to
some extent.70 In the three countries, the systematic politicization of appointments seems
to serve, to a significant extent, the purpose of creating illegal sources of influence and
income, or simply employment opportunities. Serbia might be also grouped here,
because of the long-lasting tradition of abusing authority and state entities placing
themselves above the law, whereas such behavior appears to result in only a limited
degree of legal action being taken.71
- Raising tax burden - Agencification in transitional countries has often been used
to raise the tax burden, i.e. agencies have been allowed to charge user fees, while there
is no equivalent reduction in general tax levying.72
- Some countries such as Hungary and Romania (unlike, for example, Croatia, Estonia,
Lithuania and Slovakia), are the countries having continuity compared to other countries,
and represent 'old states' with basic state structures (including agencies) that were
already in place. It was more difficult for the governments of these countries to reorganize their
administrative systems from scratch following the separation. Rather, the development of
agencies was more path-dependent on the previous institutional designs, hence the total
number of agencies operating there might be considerably greater than in countries that did not
have continuity.
4.4.4. Agencies - EU requirements or EU recommendations?
As already discussed, one of the most cited reasons for agencification in the CEE countries and
Serbia is the influence of EU accession. However, different studies argue that there are no
specific requests from the EU regarding creation of agencies and fragmentation of the public
sectors of member/acceding/candidate countries. For example, according to the report
published by SIGMA73, there are no specific EC rules on the use of separate agencies or on
agency governance, except for some aspects of the important financial control regime
imposed on any entity involved in the management of EU funds. Indeed, management of
EU subsidies is one of the most agencified tasks amongst majority of EU countries.
70
Ibid.
Agency for Public Administration Development (2002) The Serbian central government administration:
Organizational challenges - Impressions and recommendations from the Norwegian expert group
72
Beblavy, M. (2002) Understanding the Waves of Agencification and the Governance Problems They
Have Raised in Central and Eastern European Countries, OECD.
73
OECD (2007) Organising the Central State Administration: Policies & Instruments, Sigma Papers, No.
43, OECD Publishing. SIGMA is the Support for Improvement in Governance and Management project,
that is a joint initiative of the OECD and the EU, principally financed by the EU.
71
Draft Analysis of agencies in the Republic of Serbia — Page 65
Box 15. EU requirements regarding creation of agency
"As far as EU Member States are concerned, a growing number of sectoral policy instruments —
regulations or directives — implicitly or explicitly oblige governments to set up organizational units in
order to implement the corresponding common policy or in order to regulate a sector that has to be
opened to competition from other member states’ operators.
However, the exact organizational form of the specialized unit or agency which has to be set up
as a result of international or EU obligations is rarely specified in the relevant multilateral treaty,
EC regulation or directive. In most cases, and especially in the case of EC legal instruments,
what is specified are the objectives to be achieved, the type of powers to be exercised,
sometimes the type of tools to be used (especially when it comes to managing funds going into
or coming out of the EU budget), and the type of guarantees to be given to the public and to
stakeholders. Sometimes these procedural obligations do not stem from a written clause in a treaty,
regulation or directive, but from the jurisprudence of the European Court of Justice. Sometimes these
obligations are specific and numerous enough to imply the necessity of setting up an independent
authority of some kind, but the relevant provisions still leave a large possibility of choice to policymakers. This possibility of choice is often underestimated, or even not perceived in new EU Member
States. The reason for this is that, during the pre-accession period, representatives of the European
Commission and their national counterparts in the candidate countries often applied pre-defined
models of agencies or public authorities, as if it had been mandatory to choose one model rather than
another. This method had some benefits in terms of allowing rather rapid decision-making and
establishment of the relevant bodies, but it also resulted very often in 'creating formal structures without
substance'."
Source: OECD (2007) Organising the Central State Administration: Policies & Instruments, Sigma
Papers, No. 43, OECD Publishing
As specified in the Box 15., there are no explicit formal requirements from the EU
regarding organizational and/or legal form that bodies which perform specific tasks
required by the EU to implement the Acquis, should take. On the basis of the analysis of the
EU document that instructs member, acceding and candidate countries preparing for accession
to the EU in terms of main administrative structures required for implementing the Acquis74, it
could be concluded that it is for each member state, acceding and candidate country to
decide which structure it will use to provide achievement of the effects of implementing
the Acquis requirements (e.g. execution of a specific task or achieving specific quality
performance). Institutional/administrative structure implementing specific task might be
either centralized or decentralized. This EU document is not mandatory, but is rather a kind of
guideline that should help countries aspiring to the EU accession. However, it contains exact
wording form relevant directives that are necessary to be implemented by the countries. Terms
used in the directives are mainly that member/acceding/candidate states should
'designate', 'identify', 'appoint' the competent authority (appropriate institution)
responsible for conducting the tasks required.
Also, according to the Guide to the Main Administrative Structures Required for Implementing the
Acquis, in some cases, the Acquis uses the term 'independence'. However, often there is no
definition of this term in the relevant directives. In those cases, the Community expects from
members/acceding/candidate states to make relevant criteria for independence of specific
authorities in charge of specific tasks that EU requests to be performed.
74
EC (2005) Guide to the Main Administrative Structures Required for Implementing the Acquis - Informal
Working Document tor Guidance Only
Draft Analysis of agencies in the Republic of Serbia — Page 66
Still in most cases, the term 'independence' primarily means that competent authority is required
to be legally separate from and operationally independent of the stakeholders working in the
specific area such as lobbying groups, service providers, operators, etc., rather than of the central
government structures and/or direct political control.
The EU only requires specific tasks to be performed, while it is entirely for each
member/acceding/candidate state to decide which administrative/institutional structure it
will use, as long as the effects of implementing the Acquis requirements are achieved.
Just in the case of several sectors (mainly in those where operate network industries,
e.g. financial control, energy, telecommunications and postal services75, competition
protection, free movement of goods - especially in such aspects like standardization and
accreditation), regulatory agencies need to be designed. In those cases, the EU
recommends/requires operational and functional independence of competent authorities
from the legislative, executive and judicial organs of a specific state (i.e. independence of
the central government apparatus and direct political control).
Establishment of regulatory agencies was driven not so much by the need to transfer executive
tasks from ministries to bodies enjoying independence to a greater or lesser degree, but to
transfer decision-making processes (e.g. regulatory tasks). As a result, the form of a regulatory
agency was more or less unknown before the EU accession process in different countries (e.g.
in Croatia, Estonia, Lithuania).76 This also applies to Serbian case, where majority of
independent regulatory bodies were created after 2001 when the Government of Serbia decided
to start harmonizing legislation with the Acquis and adopt EU standards in the specific areas
(Graph 5.).
On the other hand, it has been argued that EU interference in public sector structure of CEE
countries has gone well beyond its official competences, especially in terms of establishing
agencies in these countries. Government of Croatia, which is an EU acceding country, and
Government of Serbia, which is a candidate country, were also to great extent devoted to the
fulfillment of EU recommendations. However, as elaborated in the Subsection 3.3.1., one of the
main reasons for the proliferation of agencies in Serbia is changed perception of Serbian policy
makers of EU recommendations, as recommendations are often interpreted as requests
(because of the political reasons, self-centered interests of bureaucrats, and/or severe
misunderstanding).
Namely, during the negotiation process, the EU requires from Serbia to start performing
particular tasks. Here, an exemption of 'network' industries has to be made, as the only EU
requirements are focused on establishing independent regulatory bodies. In the essence, the
EU expects that is fully equipped competent body capable of performing necessary tasks. That
body should be independent from different stakeholders, such as regulated entities and lobbying
groups, rather than to expect competent body to have specific organizational form. In most
cases, relevant policy makers have made decisions to establish new bodies, rather than to
designate existing bodies to perform the tasks.
75
Kondylis, V. (2011) The creation of the Hellenic IA in the electronic communications and postal sector,
in Public administration in the Balkans: From Weberian bureaucracy to New Public Management (eds.)
76
Randma-Liiv, T., Nakrosis, V. and Gyorgy H. Public sector organization in Central and Eastern Europe:
From agencification to deagencification,
Draft Analysis of agencies in the Republic of Serbia — Page 67
In practice, after the Government of Serbia makes the decision to establish new agency, the
European Commission (EC) compliments it and starts monitoring a progress in that specific field
(whether particular agency has sufficient resources to execute its tasks, how it performs, if there
are political pressures that negatively affect performance of agency, etc). The EC also, through
progress reports, identifies weak points and provides recommendations for possible
improvements. Often these recommendations refer to strengthening the role, independence
and/or capacities of agency newly created. After receiving the EC recommendations, Serbian
authorities have new and even stronger excuses not to abolish unnecessary agencies. Rather,
they use this situation to explain to the public that the EU requires structurally disaggregated
agencies from the central Government to be established having higher degree of autonomy
compared to state administration bodies. In practice, agencies once established as a result of
this alleged EU conditionality, stay immune to institutional changes, as policy makers safeguard
the existing level of independence of agencies. This process in Serbia could be presented as in
the Graph 6.
Graph 6.
Draft Analysis of agencies in the Republic of Serbia — Page 68
Box 16. Case study - Independence of the Agency for Ionizing Radiation and Nuclear Safety of the
Republic of Serbia
As noted earlier, the Agency for Ionizing Radiation and Nuclear Safety of the Republic of Serbia
(hereinafter: the Agency) was not terminated despite the Draft Law on changes and amendments to the
Law on Ionizing Radiation and Nuclear Safety that prescribed termination of the Agency. The media was
speculating that the main reason for this were EU requirements banning termination of this agency.
Nevertheless, after the analysis of relevant documents, it could be just said that the Republic of
Serbia is obliged to establish or designate a regulatory body entrusted with the implementation of the
legislative and regulatory framework, but this body does not have to be necessarily independent of the
central government authorities. It shall be independent primarily of the organizations that it regulates as
well as of governmental organizations and industry groups that promote nuclear technologies.
The independence is affirmed in the Convention on Nuclear Safety77, IAEA Safety
Requirements78 and IAEA Safety Guide. All of them deal with the necessity of performing regulatory tasks
and necessary independence of a regulatory body from promoters of nuclear technologies, not from
central state administration apparatus.
Firstly, the Convention on Nuclear Safety (Article 8) requires from each contracting party to
'establish or designate a regulatory body entrusted with the implementation of the legislative and
regulatory framework ..., and provided with adequate authority, competence and financial and human
resources to fulfill its assigned responsibilities', as well as to 'take the appropriate steps to ensure an
effective separation between the functions of the regulatory body and those of any other body or
organisation concerned with the promotion or utilisation of nuclear energy.'
Secondly, the IAEA Safety Requirements stipulates that a 'regulatory body … shall be effectively
independent of organizations or bodies charged with the promotion of nuclear technologies or responsible
for facilities or activities.' Even more important, it points that: 'The structure and size of the regulatory body
are influenced by many factors, and it is not appropriate to require a single organizational model.'
Thirdly, the IAEA Safety Guide79 stresses that '... a regulatory body cannot be absolutely
independent in all respects of other parts of government: it must function within a national system of laws
and budgets, just as other governmental bodies and private organizations must do.' It continues: ' The
organizational structure of the regulatory body may differ from State to State, depending on the national
legal system and practices. This Safety Guide provides general guidance on the organizational structure
on the basis of the functions of the regulatory body, but it is recognized that alternative structures may
also be effective in providing adequate regulation of matters relating to safety.'
Although the IAEA safety standards are not legally binding on member states, any state wishing
to enter into an agreement with the IAEA for its assistance in connection with the design, construction,
commissioning, operation or decommissioning of a nuclear facility or any other activities is required to
follow those parts of the safety standards that pertain to the activities to be covered by the agreement
(whereas the final decisions and legal responsibilities in any licensing procedures rest with the states).
Still, every state should make a decision on its own on which organizational form
regulatory body should have, and whether it should be a part of the central government or
independent of it. Annex 6. presents the list of regulatory bodies operating in the area of ionizing
radiation protection and nuclear safety in different EU countries. It could be concluded that there is a
huge number of countries where relevant regulatory bodies are part of the central government,
rather than to be independent of it.
77
International Atomic Energy Agency (1999) Convention on Nuclear Safety, Official Journal of the
European Communities, L318/21
78
International Atomic Energy Agency (2000) Legal and Governmental Infrastructure for Nuclear,
Radiation, Radioactive Waste and Transport Safety, Safety Standards Series, No. GS-R-1, IAEA, Vienna,
p.3.
79
International Atomic Energy Agency (2002) Organization and Staffing of the Regulatory Body for
Nuclear Facilities: Safety Guide No. GS-G-1.1, IAEA, Vienna, p.3.
Draft Analysis of agencies in the Republic of Serbia — Page 69
As indicated, the Agency was marked to be abolished in the unofficial list that showed up in the
media aiming at reorganization of agencies. However, it was not abolished. There are two ways to explain
this: its policy autonomy (regulatory tasks that have to be performed) or political benefits. Second
consideration might be why this agency has to be organized as public agency, rather than as special
organization, since there are no administrative and/or legal obstacles for that. The answer is that the
decision on founding this Agency as a public agency was made on the high-political level.
Finally, the IAEA Safety Requirements recommends that inspection should be carried out by the
regulatory bodies in this area. This is also stipulated in the latest EC Progress Report for Serbia, that ' The
80
transfer of inspection functions from the line ministries to the Agency has not yet been achieved.' This is
so at the moment, since public agencies cannot perform inspection tasks. Thus, if the EC
recommendation is to be implemented, the Agency should eventually become special organization.
Besides abovementioned mechanisms of EU influences on the public administration, there are
some less obvious consequences of EU accession process, which indirectly influences public
sector organizations in the member/acceding/candidate countries. Namely, the
recommendations of the European Commission in the form of annual Progress Reports often
advocate development of individual government institutions, including agencies in particular
policy sectors, or at least they encourage capacity improvements (administrative, personnel,
financial) of independent administrative bodies. On the basis of the EU recommendations,
acceding countries make appropriate action plans, ensuring implementation of the
recommendations, which ultimately leads to the proliferation of agencies. This also was
one of the drivers for agency proliferation in Croatia, Serbia and the CEE countries, since
all countries have been trying to adopt as much as possible of the EC recommendations,
in order to get closer to the EU. Namely, in Croatia, the National Accession Plan included list
of activities necessary to be performed in order to fulfill EU requirements from negotiation
process81. Similar situation is when analyzing the Serbian National Accession Plan and
accompanied reports on implementation of it. Box 17. points out how the EC may instruct
countries to strengthen their administrative and institutional capacities necessary to comply with
the Acquis.
80
EC (2012) Commission Staff Working Document: Serbia 2012 Progress Report, Enlargement Strategy
and Main Challenges
81
Information obtained from the interview with Anamaria Musa, Croatian researcher and one of the
authors of the article: What kind of agencification in Croatia? Trends and future directions (2010)
Draft Analysis of agencies in the Republic of Serbia — Page 70
Box 17. EU recommendations to the Serbian Government on public bodies
According to the Action Plan for Fulfillment of Priorities under the EC 2010 Progress Report with the
aim of accelerating candidate country status adopted in 2010 by the Government of Serbia, several
EC recommendations were made relating to public bodies in Serbia, for example:
- Administrative capacities (human and other resources) of some bodies should be strengthen;
- Some bodies that already had been established should become operational;
- Some bodies should exercise some new activities (especially regulatory);
- Some procedures should be established.
List of public bodies whose operations were assessed by the EC includes: Civil Aviation Directorate
of the Republic of Serbia, Intellectual Property Office of the Republic of Serbia, Agency for Ionizing
Radiation and Nuclear Safety of the Republic of Serbia, Anti-corruption Agency, Bankruptcy
Supervision Agency, Judicial Academy, Commission for State Aid Control, Commission for
Protection of Competition, Accreditation Body of Serbia, Directorate for Agrarian Payments,
Ombudsman, Commissioner for Information of Public Importance and Protection of Personal Data,
Public Procurement Office, Securities Commission, Republic Commission for the Protection of Rights
in Public Procurement Procedures, Securities Commission, State Audit Institution, Commissioner for
Protection of Equality, Commission for the Protection of Competition, Republic Agency for Electronic
Communications (RATEL), Directorate for the Management of Seized Assets, Administration for the
Preventing of Money Laundering, Directorate for Railways, Environmental Protection Fund, Office for
Cooperation with Civil Society.
Finally, according to the EC recommendations, at least two new bodies have to be established: The
Asylum Office as the first instance body for asylum claims, and independent aircraft accidents and
disaster investigation body.
Source: Action Plan for Fulfillment of Priorities under the EC 2010 Progress Report with the aim of
accelerating candidate country status, 2010
The influence of the EU on agencification in the CEE and Balkan countries was further
strengthened by various state-specific factors – most importantly, by the consensus about the
priority of EU membership among political parties motivated to join the EU. This did not leave
much room for questioning the appropriateness of particular policy recommendations by the
European Commission.
Finally, besides the EU recommendations are country-specific to a great extent, they are
also sector-specific, and cement the sectoral approach to the design of the government
structure to great extent.82 The establishment of the agency may depend on the current level of
development of institutional framework in the particular sector. Each policy sector followed its
sector-based recommendations by the European Commission, and on that basis quite
independently established various types of agencies. Namely, the EU influence over
agencification varied from sector to sector, depending on where the EU exercises more or less
authority. Hence, the most precise information on all EU requirements on the administrative
structure necessary to implement the Acquis could be obtained just through extensive research
of the European law in relevant policy areas and accompanied interviews.
82
For example, the EU impact on the Lithuanian agency landscape was stronger in the fields of business
regulation, policy implementation and the provision of public services, while its impact was weaker in the
sectors of defense, recreation, and culture.
Draft Analysis of agencies in the Republic of Serbia — Page 71
Nevertheless, the potential impact of the accession process on the domestic
developments of the CEE and Balkan countries should not be overestimated. Namely,
there were other dimensions of uncertainty built into the accession conditions which
acted as intervening variables in the implementation of policies to meet the membership
conditions. Thus, the influence of the EU on the development of the public sector
organization of CEE, acceding and candidate countries has been limited by its own
diffusion, partly owing to the diversity of its existent member states. 83
4.4.5. Agencification by executive tasks
A recent study has provided systematic evidence of the creation of semi-autonomous agencies
at the national level to carry out 25 executive tasks in 21 countries (regulatory tasks were
excluded)84 (Box 18.). Tasks such as meteorology, bureau of statistics, unemployment benefits,
taxes, labor exchange and immigration have been agencified in the vast majority of countries
under study, while tasks like the railways, airport and broadcasting are almost always privatized.
Almost all tasks that were analyzed are either agencified or privatized in the transitional
countries. Finally, semi-autonomous agencies without legal independence are the most
preferred form across the countries.
83
Randma-Liiv, T., Nakrosis, V., and Gyorgy, H., (2011) 'Public Sector Organization in Central and
Eastern Europe: from Agencification to de-Agencification, Transylvanian Review of Administrative
Sciences, Special Issue November, p. 168.
84
Van Thiel, S. and CRIPO team (2009) The rise of executive agencies: comparing the agencification of
25 tasks in 21 countries, Paper presented at EGPA conference, Malta, September 2-5
Draft Analysis of agencies in the Republic of Serbia — Page 72
Box 18. Agencification of 25 Tasks in 21 Countries



The study included four groups of countries: Scandinavia (Denmark, Norway, Finland, Sweden),
Eastern Europe (Lithuania, Hungary, Estonia, Romania), South Europe (Portugal, Spain, Italy),
North-Western Europe (United Kingdom, Ireland, Netherlands, Belgium), Central Europe (Germany,
Austria, Switzerland), Non-Europe (Tanzania, Australia, Israel). Six group of tasks were included:
security (prosecution office, police, prisons, intelligence/secret service, immigration agency),
unemployment benefits, taxes, distribution of EU subsidies, student loans, development aid),
registration (registration of drivers licenses, vehicle registration, land registry, bureau of statistics,
meteorological office), education and information (public universities, museums, broadcasting
company), caretaking (labor exchange, hospitals, housing companies), infrastructure (forestry, road
maintenance, national airport and railway).
- Tasks related to security issues such as the prosecution of criminal suspects, the police
and prison service, the secret service (intelligence), and immigration (visa and permits) are
predominantly carried out by government units and to a lesser extent by semi-autonomous agencies.
- Tasks involving registration are executed predominantly by semi-autonomous agencies or
government units, while tasks concerning payments are carried out by executive agencies.
- Tasks that have been typically agencified are: meteorology (in 19 out of 21 countries),
bureau of statistics (17), unemployment benefits (16), taxes (14), labor exchange (14), immigration
(13), and museums (12). To a lesser degree the secret service (intelligence) has been agencified (in
11 out of 21 countries), forestry (11 but also various other types), road maintenance (11, but also 7
privatizations), and universities (11).
- Almost all countries have privatized the railways, the national airport and the national
broadcasting company. To a lesser extent, road maintenance and the national museum have been
corporatized, next to being agencified.
- Agencification has proliferated in the 1980s (for tasks such as: land registry, labour
exchange, unemployment benefits, forestry) and 1990s (for tasks such as: immigration, road
maintenance, student loans, development aid, labor exchange, forestry). Some traditional
government tasks have been agencified in the 1990s in a number of countries, such as the prison
service, the secret service (intelligence), the police, and the tax office. However, contrary to the
aforementioned trend, these tasks have on average been charged more often to statutory bodies
rather than semi-autonomous agencies. Security tasks are, over time, placed at more and more
distance from the government.
- Non-EU member states like Israel and Tanzania carry out tasks more often through
government units, and twice as often as the EU-states do. The Scandinavian and Eastern European
countries (Estonia, Lithuania and Romania, but Hungary less) have structurally disaggregated almost
all executive tasks analysed.
- Semi-autonomous agencies without legal independence are the most preferred form,
particularly in the United Kingdom, Scandinavia (Denmark, Finland, Norway, but not Sweden) and
Eastern Europe (particularly Estonia, Lithuania and Hungary, with Romania being a bit more
diversified). The Netherlands, Australia and Portugal favor statutory bodies most. Austria, Italy and
Spain seem to have no specific preference for one type of agency, as they use a highly diversified
range of organizations for executive tasks. In countries like Belgium, Switzerland, Italy and Spain,
many executive tasks are still carried out by the government. Reforms do occur in these countries
but have not accelerated significantly recently. Also, executive agencies seem to have a longer life
span on average, implying that once a task is agencified, there is no further quango-drift.
Source: Sandra van Thiel and CRIPO team (2009) The rise of executive agencies: comparing the
agencification of 25 tasks in 21 countries, Paper presented at EGPA conference, Malta, September
2-5.
Draft Analysis of agencies in the Republic of Serbia — Page 73
4.5. Deagencification
Deagencification could be regarded as a second generation of public sector reforms. It
means rationalization, that is a contraction in the number of agencies through their
abolition, absorption and merger, but it also refers to a reorganization of existing
agencies such as agency replacement, transfer of agency functions, change of agency
name, or subordination which means decrease in the autonomy of agencies. It focuses on
regaining control and coordination that governments lost due to extensive proliferation of
agencies by, among others, recentralizing or consolidation of agencies, imposing new and
stricter regulations, commissioning investigations into the performance and conduct of agencies,
supporting the development of governance codes, etc. The process of deagencification has
become wide-spread recently (similarly to the process of agencification during 80’s and 90’s),
across both developed and developing countries.85 Nevertheless, there are no indications that
these new reforms have led to less agencification.86
Agencification and deagencification are two concurrent processes, since the creation of new
agencies has been paralleled with the less noticeable fact of the demise of agencies. 87
However, while there was a range of different motives for agency proliferation in developed and
the CEE countries, motives for deagencification across the two groups of countries have been
quite similar. Main motifs for reorganization and rationalization of agencies include:

Negative, perverse and unintended consequences and outcomes of
agencification, such as underperformance, loss of control and coordination (increased
fragmentation and duplication), reduced transparency and democratic accountability,
corruption and financial scandals.88

The global financial crisis that triggered concerns over governments’ control of public
finances and the cost of running the state forces governments across the globe to
reduce the cost and scope of state activity. Privatizations, divestitures, the
disappearance of some organizational forms (e.g. statutory agencies), as well as the
state 'exit' from certain policy arenas, are a common response of governments to
changing views on the role of the state and the need for managing crises in public
finances.89 Economy of scale is expected to be achieved through search for cost
efficiency, especially by optimizing support services previously provided separately in
every single organization;

Necessity to overcome complex policy problems and minimize transaction costs,
and

Governments regard deagencification as potentially effective tool for gaining political
credits and regaining trust of the public (this is the case particularly in transitional
countries where high level of distrust in governments is noted).
85
Deagencification is also known as 'rolling back the state', in the UK it is known as 'joined-up
government', while in Australia and New Zealand as 'whole-of-government'.
86
Van Thiel, S.and CRIPO team (2009) The rise of executive agencies: comparing 25 public tasks in 15
European countries, Paper to be presented at EGPA conference, 2-5 September, p. 18.
87
MacCarthaigh, M. (2010) When, where and how does de-agencification occur? Exploring agency
termination, UCD Geary Institute, Discussion paper series
88
OECD (2001) Managing Public Expenditure, A reference book for transition countries, Governance
89
MacCarthaigh, M. (2010) When, where and how does de-agencification occur? Exploring agency
termination, UCD Geary Institute, Discussion paper series
Draft Analysis of agencies in the Republic of Serbia — Page 74
4.5.1. International experience with the reorganization of agencies
Many developing and developed countries have initiated processes of rationalization and
reorganization of agencies (e.g. Estonia in 2004, Hungary in 2006-2007, Croatia, Ireland and UK
in 2010, etc.). Search for rationalization and efficiency was most visible in the Lithuanian and
Romanian cases in 2009, that have started major reforms targeted at agencies and public sector
organization in general compared to other countries.
Various experiences of the countries during rationalization of public sector organizations may be
quite beneficial for Serbia that has not yet started rationalizing and reorganizing its agencies in a
systematical way. Hence, this Section offers experiences of four countries - Croatia, Lithuania,
UK and Ireland. Example of the Croatian reform of agencies is really important because Croatia
is the only country that conducted the process of rationalization of agencies to some extent
during the negotiation and accession process with the EU (i.e. before joining the EU). Lithuania's
experience is of crucial importance for describing how one country, that has become EU
member recently, may perform comprehensive reforms of agencies on a regular basis. An
example of the UK could be beneficial as the tests that the UK used to reduce the number of
public bodies were adopted and tailored to the Serbian circumstances for the purpose of this
Study. Different features of Irish reorganization and rationalization of agencies may be
incorporated in the future reforms of agencies in Serbia, ensuring clearer lines of responsibilities
between the Government, parent ministries and agencies.
As mentioned, policy makers in Serbia have argued several times for reorganization and
rationalization of agencies and even initiated some reforms. However, a lack of political will,
objective policy analysis, monitoring and evaluation, effective control mechanism as well as illimplementation, resistance of bureaucracy to changes, individual interests and political benefits
are the reasons why the outcomes of these reforms were rather modest. Hence, systematic
approach to deagencification would enable public savings, better coordination between state
administration bodies and agencies, increase efficiency, effectiveness and value for money that
agencies offer to citizens.
4.5.1.1. CROATIAN REFORM90
Croatia is the country that Serbia could be compared to given their similar political, legal,
administrative, and institutional backgrounds.
a) Croatian agencification
As in many other countries, agencies and other types of more or less autonomous organizations
have been extensively created in Croatia as a response to the pressures for efficiency and
effectiveness. The EU accession process has had a decisive influence on the agencification
90
The data, information and assessments on Croatian agencification and deagencification are taken from
the articles written by Musa, A. and Kopric, I. (2010) 'What kind of agencification in Croatia? Trends and
future directions', Transylvanian Review of Administrative Sciences, Special Issue.
Draft Analysis of agencies in the Republic of Serbia — Page 75
process in Croatia, as the agency model was simply transferred into the public administration
and used as an instrument for fulfilling the EU recommendations for strengthening administrative
structure for implementing the Acquis. Agencies in Croatia have been created in many functional
areas, for different reasons, and without a strong legal framework and/or a strategic document
that would introduce agencies as a particular type of public bodies into the Croatian politicoadministrative system. Moreover, the agency model was used as a means for solving the
systemic and ongoing problems of administration, such as low salaries, low professionalism and
high degree of politicization.
Unlike the CEE countries such as Romania, Latvia and some other countries that reduced
number of agencies just after they became EU members, Croatia is the only country that
reduced number of agencies before joining the EU.91 Given the categorization of agencies
described in the Section 4.3., Croatia had more than 20 semi-autonomous agencies, 75
statutory agencies, a significant number of voluntary sector organizations (22 chambers, 13
associations, 6 foundations) and about 60 state-owned companies in 2009. However, two broad
groups of agencies in Croatia are of particular interest for this study and possible
recommendations for rationalization of Serbian structure of agencies: semi-autonomous
organizations without legal personality and the agencies with legal personality ('regular type' of
agencies).
Semi-autonomous organizations without legal personality are highly integrated into the
Croatian state administration system, with a certain level of decision-making autonomy. Legal
framework of central state administration with regard to their internal organization, personnel
(recruitment, salaries), and financial management applies also to semi-autonomous
organizations and they face strong political control since their CEOs are politically appointed.
Three groups of semi-autonomous agencies without legal personality in Croatia could be
distinguished:
 Internal organizational units of ministries with special autonomy - They are perceived as
'ministries within ministries' for their structural distinctiveness and special position within
the respective ministry mirrored in the special legal framework of these units and the
special positions of their CEOs. There is no need to develop a special policy unit as long
as the semi-autonomous organization stays within the ministry. This group included
several special administrative organizations (e.g. the Tax Administration and the
Customs within the Ministry of Finance, the Police within the Ministry of Interior, or the
Directorate for Prison System within the Ministry of Justice). This group of agencies
might be compared to Serbian bodies within ministries.
 Government services and offices - Two organizations had the status of Government
service without legal personality (information and technical support), with 12 offices
engaged in policy-making and monitoring in different areas (e.g. offices for gender
equality, social partnership, civil society, prevention of drug abuse, human rights). This
group of bodies might be compared to Serbian Governmental services.
 Central state administration bodies - This group consisted of 8 administrative
organizations and 2 central state offices in 2009. The former were bodies with significant
specialization regarding the work method and function, which has been traditional in the
91
Randma-Liiv, T., Nakrosis, V. and Gyorgy H. (2010) 'Public sector organization in Central and Eastern
Europe: From agencification to deagencification', Transylvanian Review of Administrative Sciences,
Special Issue, p. 168.
Draft Analysis of agencies in the Republic of Serbia — Page 76
state domain (e.g. State Statistical Bureau, State Geodetic Administration, State
Weather Institute). The latter were introduced in 2003 mainly for the performance of new
functions with horizontal implications and coordinating role (State Office for e-Croatia,
State Office for Strategy and Coordination of EU Funds). Heads of these bodies are
appointed by the Government. Finally, these bodies have experienced frequent changes
in terms of their number (ranging from five to fourteen), mergers and splitting-up, and
changes in legal status. This group of bodies might be compared to Serbian special
organizations.
In Croatia, three main types of agencies with legal personality ('regular' type of agencies,
statutory bodies) are:
- Regulatory agencies - there were 12 regulators in total (including the Croatian Competition
Agency, the Croatian Postal and Telecommunications Agency, the Croatian Agency for
Financial Markets Supervision, or the Agency for Medications and Medical Products);
- Executive agencies - there were 41 executive agencies (e.g. the Agency for Public-Private
Partnership or the Agency for Regional Development), and
- Expert agencies for policy support, which are focused on policy preparation and monitoring,
mostly in the social sphere - health, environment protection, education (e.g. the Croatian Public
Health Institute and the Croatian Food Agency), and created in the form of a public institution,
which makes them relatively autonomous.
Box 19. Specific characteristics of agencies in Croatia
Out of 75 agencies with legal personality, 63% of them were established by law enacted by the
Parliament, while others were established by the Government. With regard to their legal status, 75% of
agencies have been established in the form of public institutions, and 25% simply as ‘legal persons’ (or
‘legal persons with public authority’), a sort of a general category used by the legislator in order to avoid
the application of a stricter legal framework for public institutions (especially with regard to personnel and
ministerial control). Moreover, only 50% of all agencies are named ‘agency’, while the other half
encompasses institutes, funds, centers, registers, offices or bureaus in their names.
As shown in the Table 10. almost two thirds of Croatian agencies were established under the
influence of EU accession. The strongest normative underpinning for agency creation came
from the Stabilization and Association Agreement (signed in 2001), to which the political and
administrative elites adhered almost completely, and continued to do so after 2005 when the
negotiations for membership started. The ‘Europe made me do it’ excuse was often used
even when there was no formal EU pressure for institutional change; hence, this driver
should be interpreted with caution, as in CEE countries and Serbia.
Table 10. Agencies by the time of creation
Time Frame
1990-2000
Number of
Agencies
22
%
Agencies by the Time of Formation
29,33
Inherited agencies (before 1990)
Transition period agencies (1991-1999)
2000-2009
53
70,06
Europeanization I agencies (SAA 2000-2004)
Europeanization II agencies (negotiations 2005-2009)
Total
75
100
Total
Source: Musa, A. and Kopric, I. (2010) 'What kind of agencification in Croatia? Trends and future
directions', Transylvanian Review of Administrative Sciences, Special Issue. p. 44.
Draft Analysis of agencies in the Republic of Serbia — Page 77
b) Croatian and Serbian agencification - Comparison
Graph 7. represents comparison between number of agencies in Serbia and Croatia after 2000.
It could be noted that Serbia created much more agencies during this period than Croatia. This
could be explained by two facts. Firstly, Croatia gained its independence in 1991, and was
forced to create its own agencies immediately after the collapse of the federal state. In the
period 1990-2000, 22 agencies were created in Croatia92, while 12 were created in Serbia93.
Unlike Croatia and other ex-Yugoslavian countries, Serbia represents an 'old state' with basic
state structures and agencies in place after Federal Republic of Yugoslavia and State Union of
Serbia and Montenegro dissolved (in 1991 and 2006, respectively). So, it could not be expected
that the separation of the two abovementioned states would result in the excessive creation of
agencies in Serbia, as it happened Croatia; thus, total number of agencies created in Serbia
during 1990-2000 was smaller than in Croatia. Secondly, the changes of the social and political
climate towards developed democracy principles, as well as the turn from centralism towards
the concept of decentralization, have happened earlier in Croatia compared to Serbia. Both
factors led to establishment of a greater number of agencies in Croatia between 1991-2000, and
greater number of agencies created in Serbia after 2000.
Graph 7.94
Source: Websites of Serbian Agencies and Musa, A. and Kopric, I. (2010) What kind of agencification in
Croatia? Trends and future directions, p. 44.
c) Croatian deagencification
As discussed, eruption of the economic crisis in 2009, economic downturn, necessary decrease
of public spending, forced many countries across the Europe to rationalize and reorganize their
public sector organizations and structures. The same happened in Croatia, whereas above
mentioned pressures were stressed by the public dissatisfaction with governance at all levels
92
Musa, A. and Kopric, I. (2010) What kind of agencification in Croatia? Trends and future directions,
Transylvanian Review of Administrative Sciences, Special Issues, p. 42.
93
See Annex 1.
94
There is no data for number of agencies in Croatia in 2012.
Draft Analysis of agencies in the Republic of Serbia — Page 78
and a chaotic public sector. The Economic Recovery Program of the Croatian Government 95
adopted in June 2010 set the following goals as the priorities for rationalization of the public
sector:
- the creation of a register of public employees;
- the decrease of the number of public employees by 5%, and
- the review of agencies, including the formulation of the criteria for agency creation and
control, and redefining the functional scope for existing bodies by concentrating similar
tasks in one agency or ministry (by merging and augmentation).
In July 2010, the Croatian Government adopted the Proposal for Reorganization of Agencies,
Institutes, Funds and Other Legal Persons with Public Authority 96 (hereinafter: Proposal), which
accentuated an urgent need to abolish (by merger, absorption or abolishment) 14 agencies from
different policy sectors, using three basic criteria:
- The size of an agency measured in the number of employees
- Their expenditures, and
- The possible functional overlapping or similarities with other organizations.
The Croatian Government decided neither to analyze nor to reorganize those agencies
that are related to the EU in any way (e.g. agencies whose capacities and operations were
monitored by the EU in the EC Progress Report, agencies that were set up with the EU
donor help), until the consultations with the EU are not conducted.
As specified in the Proposal, Ministry of Administration, in cooperation with all central state
administration authorities, made an analysis of agencies, their costs of operations and
jurisdictions. The Croatian Government adopted a Government Conclusion first, arguing that
public administration reform is necessary, and provided guidelines. All relevant ministries were
obliged to make reorganization/rationalization plan and perform it, proposing possible mergers,
absorptions and/or acquisitions with central state authorities, and abolitions. Of crucial
importance were the criteria such as overlap between jurisdictions and duplicating units.
Two phases of reorganization were envisaged. The first phase was based on the process of
abolishing, merging and absorbing public bodies, which did not influence obligations that the
Republic of Croatia had undertaken during the process of EU accession. The second phase
envisaged further rationalization that should have been made in accordance with consultations
with the EC concerning consolidation of public bodies that were established as a part of
commitments undertaken by the Republic of Croatia during negotiations on EU accession.
In the cases of absorptions and acquisitions, relevant central state authority took over tasks,
equipment, financial resources, rights and obligations, as well as employees of abolished public
bodies to enable regular execution of all necessary tasks. In the cases of mergers, newly
established public body took over tasks, equipment, financial resources, rights and obligations
as well as employees of abolished public bodies. Newly founded bodies were obliged to take
over employees of abolished and merged agencies. Public officials were made available upon
95
Government of the Republic of Croatia (2010) The Economic Recovery Program of the Croatian
Government.
96
Government of the Republic of Croatia (2010) Proposal for Reorganization of Agencies, Institutes,
Funds and Other Legal Persons with Public Authority, Ministry of Administration, p. 2.
Draft Analysis of agencies in the Republic of Serbia — Page 79
the determination of the number of employees needed for carrying out the tasks of newly
established bodies, that is, classification of work posts made by relevant ministries. Their status
should have been settled in accordance with the provisions of the Civil Service Law and the
Labor Law.
An immediate consequence of the law amendments during the following two months was
a 20% decrease in the number of agencies. In sum, 14 public bodies were abolished, merged
and/or absorbed, whereas their number was reduced to 3 legal persons. Those 14 agencies had
962 employees and their annual expenses went beyond €2 mil, with 20% spent for 'intellectual
services'. This evidence indicates that the agencies which were supposed to serve as
specialized expert organizations frequently outsourced expert services in order to accomplish
their tasks.
Several lessons from Croatian experience with deagencification could be taken into account
before pursuing the reform of agencies in Serbia:
 Croatian reform proves that it is possible to reduce the number of agencies prior to
joining the EU;
 Implementation of the Acquis should not be an excuse for not conducting the
reform of agencies. The EU should be consulted when it comes to rationalization and
reorganization of agencies performing the tasks required by the EU. Namely, it is up to
the member/candidate countries which structures will choose to perform the tasks,
however, the bodies performing the tasks need to be sufficiently equipped and to have
necessary expertise to perform them efficiently and effectively. It is of crucial importance
to inform the EU on the changes that are to be made, possible challenges, as well as
capacities and expertise of ministries (sectors/departments/units) or newly designated
agencies that will be performing required tasks (e.g. how the transfer of tasks, rights and
obligations, equipment, financial resources, and employees of abolished public bodies
will be exercised and what are the capacities and expertise), and
 The Croatian Government neither analyzed nor reorganized agencies related to the EU
before the consultations with the EU. However, given the myths this study
deconstructed, the Government of Serbia may freely analyze all the agencies and
consider possible rationalization and reorganization of existing forms of agencies
(except regulatory independent bodies to some extent).
4.5.1.2. LITHUANIAN REFORM97
Lithuania is the country that Serbia could be compared to also given the similarities regarding
political and administrative systems of the two countries. Also, Lithuania is one of the few
European countries that continually review its agency landscape, trying to optimize the structure
of public administration, so Lithuanian experience may be helpful for future Serbian reform of
agencies.
97
Data and information related to Lithuanian reorganization of agencies are taken from Nakrošis, V. and
Martinaitis, Ž. (2010) 'Sunrise' and 'Sunset' of Lithuanian Agencies, Transylvanian Review of
Administrative Sciences, Special Issue, p. 93-114.
Draft Analysis of agencies in the Republic of Serbia — Page 80
a) Lithuanian agencification
At the end of 2009, there were about 499 agencies under the government, ministries and
President (with territorial units) where the Civil Service Law was applied. Additionally, there were
a few dozen of agencies under the ministries where the Civil Service Law was not applied, and
more than 200 public non-profit institutions and foundations that were established by the state
institutions and that received funding from the state budget. In addition, 143 state-owned
companies were involved in the provision of services or products for the public.
Table 11. Categorization of the Lithuanian agencies and other public sector organizations at the
central level at the end of 2009
Category
0
Definition
Agencies and other public sector organizations
Unit or directory of the national, central The President's Office (1), the Prime Minister's
or federal government
Office (1), ministries (14)
1
Semi-autonomous organization, unit or Government agencies (100), agencies under the
body without legal independence
ministries (397), agencies under the President (2)
2
Legally independent organization/body Public non-profit institutions whose stakeholders
with managerial autonomy
are state institutions (227)
3
Non-for profit organization established Foundations (unknown number)
by or on behalf of the government like
a foundation
4
Organization established as
State-owned companies, whose owners are state
corporation, company or enterprise
institutions (143)
Source: Nakrošis, V. and Martinaitis, Ž. (2010) 'Sunrise' and 'Sunset' of Lithuanian Agencies,
Transylvanian Review of Administrative Sciences, Special Issue, p. 93-114.
The three main factors were leading to the proliferation of agencies, but also to the
reorganization of the existing ones in Lithuania: politicization of civil service due to political
instability98, the need to establish completely new organizations or reorganize the
existing ones99, and the EU accession process.
As in Serbia and Croatia, the impact of the EU on agencification was mediated especially by the
cross-party consensus about the priority of EU membership in the pre-accession period. Also, a
network of regulatory agencies emerged during the EU precession period. A number of relatively
independent regulatory agencies with extensive regulatory authority were set up or strengthened
in the policy areas of competition, telecommunications, energy, water, railways, post, public
98
The Lithuanian government is one of the most unstable in the CEE region with 14 changes in the 19902010 period. An average length of the governments was about 16 months. More stability was gained in
the 2000-2010 period (with five changes), while the 2008-2012 Government has been in office for more
than 30 months.
99
For example, the State Security Department was set up just fifteen days after the re-establishment of
the Lithuanian independence in 1990 in order to safeguard the new Lithuanian state, its sovereignty and
the constitutional order against encroachment. Moreover, number of the Lithuanian agencies under the six
selected ministries in the 1990-1996 period were established in the form of pure birth due to the need to
carry new governmental functions (for instance, the Lithuanian Labor Exchange and the State Social
Insurance Fund Board - both under the Ministry of Social Security and Labor, the Standardization and
Quality Department under the Government, the State Tax Inspectorate and the Audit Department - both
under the Ministry of Finance, and the State Road Transport Inspectorate under the Ministry of Transport
and Communications). Also, a relatively high number of other change events (especially 11 agency
replacements, see Table 2 below) occurred during the transition period. For instance, such agencies as
the Lithuanian Hydrometeorological Service, the Transport Investment Directorate or the Insurance
Supervisory Commission replaced the former agencies that were considered to be obsolete.
Draft Analysis of agencies in the Republic of Serbia — Page 81
information, environment, food safety and personal data in order to meet the regulatory
requirements of the EU.100. Today, the EU is actively involved in the ex post control of the EU
support agencies through regular audit and monitoring. However, the influence of the EU is
confined to a limited set of the Lithuanian agencies, which operate in supranational
policy fields related to smooth operation of the single market or where the EU has
exclusive policy competences (especially the CAP).
Table 12. Results of mapping the Lithuanian agencies under six selected ministries 1990-2010
Events of organizational change
'Birth'
Secession
Split
1990-1996
20
0
1
Absorption
Merger
'Death'
1
0
2
Period of change
1997-2004
16
3
3
3
3
2
2005-2010
3
1
1
3
4
3
Replacement
11
11
2
Transfer of functions
0
1
0
Change of name
2
8
9
Change of subordination
2
15
2
Total number of changes (changes per
39 (5.6)
65 (8.1)
28 (4.7)
year)
Source: Nakrošis, V. and Martinaitis, Ž. (2010) 'Sunrise' and 'Sunset' of Lithuanian Agencies,
Transylvanian Review of Administrative Sciences, Special Issue, p. 93-114.
b) Lithuanian deagencification
Main factor leading to reorganization and rationalization of the Lithuanian agencies were
government-wide organizational reforms in the periods of 1999-2000, 2006-2008 and
2009-2010, pursued by the advisory 'Sunset' Commissions. Their key purposes were to
optimize the structure of public administration and reduce the number of public sector
organizations and civil servants.
The 1999-2000 (right-wing) government implemented a few organizational reforms at the
agency level, based on the proposals of the 'Sunset' Commission.101 However, due to the short
political term of this Government and other obstacles, some organizational reforms proposed by
this Commission were not implemented (including reform of the government agencies).
100
The need to implement various EU expenditure programs explains the reorganization of the European
Social Fund Agency (in 2002) and the Central Project Management Agency (in 2003), which were
responsible for the implementation of the EU Cohesion Policy, and largely the de novo establishment of
the NPA (in 1999), which is responsible for the implementation of the CAP in Lithuania. While the
establishment of the latter agency was based on the Commission’s recommendations for accredited
paying and implementing agencies, the design of the former agencies depended on specific national
circumstances.
101
For instance, following a complex reorganization of 5 organizations, 2 new regulatory agencies (the
State Food and Veterinary Service and the State Non Food Products Inspectorate) were set up in 2000.
Also, a single fisheries department was established following the reorganization of 2 separate fisheries
departments.
Draft Analysis of agencies in the Republic of Serbia — Page 82
The establishment of the second 'Sunset' Commission after the appointment of a new center-left
coalition in 2006 revived organizational reforms. The main task of the 2006-2008 Commission
was to review the functions of 99 public non-profit institutions. This review found that the public
non-profit institutions often carried out functions unrelated to the provision of public services
prescribed in the Law on Public Establishments, so some organizational changes were
proposed. However, due to a lack of political support, the reform of these institutions was not
successful; only 2 public non-profit institutions were abolished, while 2 others were merged into
one budgetary institution by the end of 2008. The 2006-2008 Government also failed to
implement other organizational reforms.
The 2008-2012 (center-right) government initiated broad organizational reforms, whose purpose
was to improve effectiveness of the government sector. These reforms affected all types of
agencies and other public sector organizations, and its outcomes were the following: first, a few
government agencies have been abolished or reorganized following their review in the third
'Sunset' Commission in 2009. Second, reviews of the 'Sunset' Commissions brought some
changes (especially deaths and reorganizations) to the agencies under the ministries in 2010.
Third, the merger of several business regulatory agencies was ongoing in the areas of financial
regulation and physical infrastructure in 2011. Fourth, it was sought to ensure more transparent
and result-based management of public non-profit institutions and state-owned companies,
whose owners and stakeholders were state institutions.
Increased number of changes in the life of agencies led to the agency contraction from 2005 to
2010. In 2010, 6 such changes (2 absorptions, 3 mergers, 1 death) were registered. 102 Although
all government-wide reforms occurred after the change of governments in 1999, 2006 or
2008, the more successful reforms in Lithuania were initiated by right-leaning political parties
and their leaders in response to the economic crises that started in 1999 and 2009.
Lithuanian experiences might be instructive for Serbia as this country created a mechanism for
constant review of agencies and other public sector organizations, through establishment of the
advisory 'Sunset' Commissions. Although some organizational reforms proposed by these
commissions were not implemented due to a lack of political will, there are some visible shifts
towards more effective public sector. Hence, as in the Lithuanian case, aim of the Serbian
Government should be to:
 Develop a strategic view on the structural and functional setup of agencies;
 Increase the transparency of the institutional setup of the government;
 Create temporary body that would be in charge of reviewing agencies, and
 Lessen the organizational diversity and fragmentation.
In doing so, a challenge in developing whole-of-government, lack of coordination mechanisms,
and negative consequences of the ad hoc setup and proliferation of agencies, could be
overcome.
102
The number of state and municipal institutions (including their territorial units) where the Civil Service
Law is applied, decreased from 848 (at the end of 2008) to 774 (at the end of 2010). A significant
reduction in the number of these institutions is attributable to the abolition or reorganization of territorial
units. For instance, 46 local labor exchanges were reorganized into ten territorial exchanges in 2010.
Draft Analysis of agencies in the Republic of Serbia — Page 83
4.5.1.3. UK REFORM
The UK is a developed country with different, but much more settled administrative system
compared to the Serbian one. Serbia has something to learn from such administrative system.
Additionally, UK deagencification experience could be of crucial importance for Serbia, primarily
because of the tests/criteria that the UK government applied when rationalizing and reorganizing
its public bodies.
In 1988, the Thatcher government launched a major restructuring program (the so-called 'Next
Steps Initiative', turning out to be a ‘bonfire of quangos’) to carve out large blocks of operational
activity and place them in executive agencies that would be ‘at arm’s length’ from ministerial
departments.
Box 20. First initiative aiming at creating agencies in the UK
The main idea of the 'Next Steps Initiative' was improving management and accountability in the UK
Government, through delivering services more efficiently and effectively, for the benefit of taxpayers
and customers. The main tool for achieving this was discharging executive functions from the
central government, their delegation to and carrying out, to the greatest extent possible, by units
designated as executive agencies, and headed by chiefs executive. They were established within a
framework of policy and resources set by the responsible ministers in consultation with the UK
Treasury. The intention was that, while strategic control of the agency remained with the minister,
responsibility for the day-to-day operations of each agency was delegated to chiefs executive. Most
agencies remained in the civil service.
Departments were responsible for identifying, and their ministers for deciding which activities may
be suitable for agency status. The main criteria was whether activities were capable of becoming
discrete administrative units, sufficient in size to justify any major structural changes that might be
necessary, concerned with the delivery of services, and independently accountable within the
department. Areas of work where the day-to-day involvement of the department or its minister was
inevitable, or where policy making and policy execution were inextricably linked, were unlikely to be
suitable candidates for agency treatment.
Source: National Audit Office (1989) Next Steps Initiative
During the ensuing decade, more than 130 new agencies were set up, and at the peak they
collectively employed more than 70% of UK civil servants.103 In 2002, an official review by the
Blair Government concluded that this multiplication of agencies brought improvements, but that
it had increased the distance between ministries and operational management and led to a loss
of policy co-ordination104. Some agencies were then merged with each other, drawn back into
departments or at least subject to a tighter ministerial control. By doing so, the 1980s impulse to
decentralization had been replaced with a desire for more central control and co-ordination in
2000s.
Blair/Brown' New Labor administration (1997-2010) had similar pledges regarding reorganizing
central government. However, whilst above mentioned administrations abolished some
103
Pollitt, C., 30 years of Public Management Reforms: Has there been a pattern?, A background paper
for the World Bank consultation exercise
104
Office of Public Services Reform (2002) Better government services: executive agencies in the 21st
century. London, Cabinet Office
Draft Analysis of agencies in the Republic of Serbia — Page 84
organizations and merged others, neither achieved reform on the scale that was initially
pledged.105 Finally, the Conservative-Liberal Democrat coalition formed after the 2010 general
election, also initiated and realized reorganization of the central government. In order to reduce
the number and cost of quangos, the UK Government conducted a review of all public bodies
sponsored by departments, excluding executive agencies, to identify those which it felt were no
longer necessary, or which needed to become executive agencies. The review focused on
whether bodies' functions were necessary, and if they were, whether they had to be
delivered at arm’s length from the Government.106 As announced, the aim of this review
was primarily to increase the accountability of the government, with value for money
being a secondary consideration. The review attempted to identify functions that could
be transferred from public bodies to central departments, unless there is a reason why
the function needs to remain at arm's length from ministerial influence. By doing so,
ministers should become directly responsible for majority of government activities and
the decisions taken, and could be held to account by the Parliament and the electorate
for the discharge of those functions.
Public bodies under the review were public sector organizations that a minister was not directly
accountable for. They were sponsored by parent departments. However, the majority of
Government departments did not manage their public bodies, although they were obliged to do
so. In addition, many departments did not make clear expectations from public bodies in terms
of performance, nor the sanctions for different levels of overspending, although there was a role
for sponsoring departments to play in providing oversight. The most likely reason for this
confusion over the proper relationship between departments and the bodies they sponsor was
the fact that there were numerous different types of public bodies.107 They were supposed to be
subject to different levels of involvement with their parent department, but crowded landscape of
public bodies left departments unsure about what approach to adopt.
The ministers and Prime Minister responsible for the review were explaining that the review was
a two stage process. First, 'existential' test was used to determine whether a body was
performing a function that was necessary for the state to perform. If a body passed this stage,
then the Government used three further tests to determine whether the function needed to be
delivered outside a central department. These three tests were used because, according to the
Prime Minister's opinion, they represented areas where the public wanted reassurance that
actions, decisions, or the provision of services were insulated from political influence:
- the 'technical' test - body passed the test if a precise technical operation needed to be
performed;
- the 'impartiality' test - it was right to delegate power to an independent body when
there was a need for politically impartial decisions to be made about the distribution of
taxpayers' money (especially in areas like the arts and science, where the public expects
funding on merit, not favoritism), and
105
House of Commons, Public Administration Select Committee (2010) Smaller Government: Shrinking
the Quango State, Fifth Report of Session 2010–11
106
Further data and information on the UK reorganization of public sector bodies is based on the House of
Commons, Public Administration Select Committee (2010) Smaller Government: Shrinking the Quango
State, Fifth Report of Session 2010–11
107
House of Commons, Public Administration Select Committee (2010) Smaller Government: Shrinking
the Quango State, Fifth Report of Session 2010–11
Draft Analysis of agencies in the Republic of Serbia — Page 85
-
the 'facts' test - a need for independent action was justified when some facts needed to
be transparently determined.
The Government commanded the departments to apply the above mentioned tests. After that,
the Government inspected the review results, and tested the conclusions that the departments
had reached. Finally, the Public Bodies Reform Bill giving the Government the power to bring
about these changes was adopted.108
Table 13. Outcome of Public Body Review in the UK
Outcome
Number
%
Abolished
192
21%
Merged
118
13%
Retained
380
42%
Retained and Reformed
171
19%
Under review
40
4%
Source: House of Commons, Public Administration Select Committee (2010) Smaller Government:
Shrinking the Quango State, Fifth Report of Session 2010–11
However, the House of Commons and other public authorities were criticizing the Government
because109:
- Of the lack of clarity in the tests, questioning whether the tests had been properly
thought through, whether they were capable of clear definition, and whether all the tests
were necessary in determining whether a function should remain at arm's length from the
Government;
- No written guidance or clarification had been issued to departments explaining the tests
and how they should apply to departments' public bodies;
- Criteria failed to take account of the current performance of existing bodies;
- Government was not transparent about one of its motivation for the exercise of the
review, that is, increasing value for money in the delivery of the functions (although the
Public Bodies Reform Bill includes a different list of factors that the ministers must have
regard to when making an order for reorganization, including achieving increased
efficiency, effectiveness and economy in the exercise of public functions110);
- Government failed to conduct a proper and consistent consultation exercise during the
review process, although it was a minimum that the bodies affected were consulted to
see how they thought the Government's tests applied to them;
- The Public Bodies Reform Bill giving the Government the power to bring about these
changes was badly drafted.111
According to the House of Commons, the common denominator for all the tests was
independence from the Government. Given this, there was no reason for the 'technical' test and
the 'facts' test (that appeared to be a subsection of the wider political impartiality test) to be
used. Hence, the following set of tests was proposed:
- Whether a function needs to be performed ('existential' test);
108
Public Bodies Reform Bill (Lords), HL Nill 25 (2010/2011)
House of Commons, Public Administration Select Committee (2010) Smaller Government: Shrinking
the Quango State, Fifth Report of Session 2010–11
110
Public Bodies Reform Bill (Lords), HL Nill 25 (2010/2011)
111
Indeed, the Public Bodies Reform Bill has been redrafted recently.
109
Draft Analysis of agencies in the Republic of Serbia — Page 86
- Whether it is appropriate for it to be performed independently by a public body
('impartiality' test), and
- How it can be delivered most cost-effectively ('value for money' test).
As a result of the deficiencies of the review design features, some unwanted consequences
appeared during the reform:
 The departments were not clear about how they should interact with the bodies they
sponsor, failing to strike the right balance between oversight and independence;
 An existing complexity of the public bodies' structures did not change;
 In several cases, the Government declined to provide an explanation for why it intended
to retain a body, which suggests that some decisions might have been taken without
reference to the tests112;
 Similar bodies were treated differently (it was unclear why some bodies needed to be
independent, but some others not, and why some bodies were kept, while some others
were not), and
 Some bodies were retained on the grounds of 'transparency' which suggests that despite
the fact that this was not one of the tests that the Government laid down, the use of an
additional test to justify a decision suggests that the tests were not applied consistently.
According to the criticizers, all this suggested that there was no coherent and consistent process
for reviewing public bodies. Some of above mentioned inconsistencies were at least partially
caused by the ('extraordinary') speed at which the review had been conducted, as it had not
been conducted with the necessary care. Some of the criticizers noted that the thing was rushed
due to the political necessity to show that something had been done. After all remarks and
comments, Government has taken some steps to rectify this, but the question is how useful
consultation could be, given that decisions on the future of many bodies have already been
taken.
UK reform of public bodies might be instructive for Serbia for several reasons:
 It showed that crowded landscape of public bodies makes confusion especially
regarding establishment of proper relationship between parent ministries and
arm's length bodies. If parent ministries, the Government and/or the National
Parliament do not make their expectations in terms of performance, sanctions
(especially because of different levels of overspending) and rewards from agencies
clear, agencies will try to involve with parent ministries as less as possible in all
aspects of their functioning and operating;
 The transparency of the review process and reorganization of agencies in
Serbia must be at the highest level. This means that proper and timely
112
The UK Government declined to provide the explanations for why it intended to retain some bodies in
three cases. Firstly, it happened when the body was retained and subject to radical reforms e.g.
Environment Agency, Equalities and Human Rights Commission, Financial Reporting Council, Forestry
Commission, Homes and Communities Agency and Natural England. Secondly, it happened when two or
more bodies were merged e.g.: Certification Office and Central Arbitration Committee; Competition
Commission and Office of Fair Trading; Gambling Commission and National Lottery Commission; UK
Sport and Sport England; Pensions Ombudsman and Pensions Protection Fund Ombudsman; Serious
Organised Crime Agency into the new National Crime Agency; and Crown Prosecution Service and
Revenue and Customs Prosecutions Office. Thirdly, it happened in the case when a body was simply
retained e.g. Competitions Appeals Tribunal, Equality 2025, Health and Safety Executive, and Royal Mail
Holdings Plc.
Draft Analysis of agencies in the Republic of Serbia — Page 87


consultations have to be made with all parent ministries, agencies, other
stakeholders and the public; data have to be provided and accessible to anyone
affected and/or interested in the reform, and finally, all decisions and criteria have to
be explained in a proper manner to all interested parties;
Reform in Serbia should be carried out with necessary care and without
rushing the process, and finally
Some of the tests applied by the UK Government could be thought through and
adjusted to Serbian economic, legal and administrative circumstances.
4.5.1.4. IRISH REFORM113
Irish experience with deagencification was chosen for this study as main concepts of Irish
approach might be fed into the Serbian process of creation and termination of agencies
As of end 2011, there were 335 agencies operating at the national level in Ireland, a light
decrease from a peak number achieved in mid-2008 (349).114
As the scale of the financial crisis began to unfold in 2008, a first tranche of agency
rationalizations in Ireland was announced with the government responding to media and
opposition pressure for a ‘bonfire of the quangos’. Some general ‘guiding principles’ for agency
reorganization were identified, including:
- Responding to the needs of citizens;
- An emphasis on departments as the primary locus of public policy formulation and
advice for ministers, rather than on agencies;
- The appropriate use of agencies for carrying out functions requiring specialist skills and
expertise;
- The elimination of duplication and functional overlap, as well as greater sharing of backoffice services;
- Recognizing staff views on reform, and
- Regular reviews of the relevance of agency objectives in line with Government policies.
The initial terminations were of ‘low-hanging fruit’. This means that agencies that had principally
advisory roles, were of comparatively small size and with no statutory independence, ceased
operations without much difficulty of public attention. Following a number of subsequent reviews,
the next stage in the deagencification project began, involving a considerable number of
mergers of larger and more complex organizations. These rationalizations quickly ran into
resistance from staff, management and stakeholders and encountered unforeseen legal, HR,
industrial relations and infrastructure issues.
113
The data and information on Irish reform are taken from the article written by MacCarthaigh, M. (2012)
Quangocide, culs and bonfires? Agency rationalization in times of crisis, Paper presented at PSA
Conference (Specialist Group on Executive Politics and the Structure and Organization of Government),
Institute of Public Administration, Ireland
114
MacCarthaigh, M. (2012) Quangocide, culs and bonfires? Agency rationalization in times of crisis,
Paper presented at PSA Conference (Specialist Group on Executive Politics and the Structure and
Organization of Government), Institute of Public Administration, Ireland
Draft Analysis of agencies in the Republic of Serbia — Page 88
A new coalition government elected in 2011, comprised of two parties committed to further
administrative consolidation (in order to meet the targets set out in a fiscal austerity ‘bailout’
program agreed with the IMF, EU and ECB in late 2010), announced its intention to115:
- Make substantial cuts to the number of state bodies and companies;
- Create an integrated decision making structure among all relevant state departments
and agencies to replace the current fragmented approach of state bodies in dealing with the
financial crisis, and
- Simplify the governance structures for agencies, including the abolition of agency
boards where possible in order to provide for clearer lines of responsibility, whereas agency
managers would be accountable directly to ministers and their departments on performance
against targets.
In its Public Service Reform116 plan published in November 2011, the minister with responsibility
for the new Department of Public Expenditure and Reform announced that it was proceeding
with:
 General idea that responsibility for policy-making should revert to the parent
departments, while agencies would be accountable for implementing policy, assessing
outcomes and value for money;
 The rationalization and reorganization of 48 state agencies/departmental bodies and
specific functions within those bodies by the end of 2012, as well as nominating another
46 bodies for critical review by the end of June 2012, in order to streamline service
delivery, increase democratic accountability of public service, and, finally, secure €20
million in enhanced service efficiencies and value for money;
 The implementation of a performance management approach (through the usage of
more meaningful performance indicators) and better expenditure analysis (through
requesting additional procurement information as part of the annual accounts from
departments and agencies); Annual reports of departments and agencies would include
output statements and audited financial accounts prepared on generally accepted
accounting principles. The performance information provided in output and outcomefocused measurement would be fed into the decision making process for future plans at
political and senior management level;
 Extensive sharing of corporate or back-office administrative functions (e.g. HR, payroll,
procurement and other services), as it was assessed that it had the potential to transform
the competitiveness of state agencies and bodies, offering significant long term savings
in their operations generally;
 The implementation of the institution of robust service delivery agreements between
parent departments and agencies and state bodies, that would focus on outputs,
accountability and efficiencies;
 The implementation of “sunset clauses” in the legislation prescribing creation of new
agencies - legislation must include a “sunset clause” ensuring that new bodies created,
will cease to exist after a predetermined date unless the agency mandate is specifically
renewed;
 The creation of annual reviews (continual assessment) of all significant state bodies by
all departments.117
115
Government of Ireland (2011), Programme for Government 2011, Department of the Taoiseach, Dublin
Government of Ireland (2011) Public Service Reform, Department of Public Expenditure and Reform,
Dublin
116
Draft Analysis of agencies in the Republic of Serbia — Page 89
The Government of Ireland envisaged that proposed process of agency rationalization or deagencification would continue to strongly inform the reform agenda in Ireland. According to the
Government's Report118, program of abolition of state agencies has accelerated. As public
bodies were also required to openly compete for budget resources by publishing pre-budget
spending requests, one of the achievements so far is that the Department of Public Expenditure
and Reform published all departments' pre-budget submissions on the website. As regards to
the performance management issue, the Revised Book of Estimates 2012 was published,
including for the first time performance indicators on program for almost every department and
office, whereas expenditure is not just assessed on how much is spent but on what is being
delivered.
It remains to be seen what else will be achieved, given the measures proposed by the
Government of Ireland. Nevertheless, the following design features of Ireland's reform may
be fed into the future rationalization and reorganization of agency landscape in Serbia in
order to enable public savings, increased accountability and value for money provided by less
crowded agency landscape in Serbia:
 Introduction of performance management;
 Extensive sharing of corporate or back-office administrative functions between
agencies (this measure will inevitably secure short term gains in the context of
economies and efficiencies, but they may not be immediate);
 'Sunset clauses' in the legislation prescribing creating new agencies;
 Insisting on annual reviews to be conducted by the departments of the business
case for agencies under their aegis;
 Abolition of agency boards, and even
 Concept of robust service delivery agreements between parent departments and
agencies could be implemented in future Serbian reform of agencies.
117
The Public Service Agreement 2010-14 (Croke Park Agreement) gives a commitment that compulsory
redundancy will not apply in the Public Service. The Agreement also sets out the redeployment
arrangements that will apply under this program, if required.
118
Government of Ireland (2012) Programme for Government: Annual Report 2012, Year 1: Stability,
Department of Public Expenditure and Reform, Dublin
Draft Analysis of agencies in the Republic of Serbia — Page 90
5. RECOMMENDATIONS
This chapter offers recommendations on the basis of the current state of affairs, experiences
from past agency reorganizations, and international best practice. Recommendations are split
into three groups. The first group deals with the stock of agencies, recommending how to
rationalize the existing structure of agencies. The second one deals with the flow, offering
effective policy options on how to prevent the administrative structure from further agency
proliferation. The third group includes recommendations that would, if implemented, ensure
greater effectiveness and quality of agencies. Some of recommendations could be implemented
in the short-term (4-6 months), some of them should be implemented in the medium term (9-12
months), while some of them could be implemented in the longer term (1-3 years). All the
recommendations should be analyzed in the context of specific steps/actions presented in the
Road map in the Annex 15.
5.1.
DEALING WITH THE STOCK - HOW TO RATIONALIZE AND REORGANIZE THE
EXISTING SYSTEM OF AGENCIES
First stage of the reform should be a one-off rationalization of existing agencies. This section
offers specific recommendations that represent a kind of ex-post tool for control of existing
agencies.
RECOMMENDATION: SET UP A TEMPORARY GOVERNMENTAL BODY TO CONDUCT
AND COORDINATE REFORM OF AGENCIES
As discussed in the Subsection 3.2.1., the initiative towards ministerial review of agencies under
their scrutiny and analysis of their effectiveness and relevance was launched in 2012. However,
the lack of coordinating body with effective mandate led to rather modest and disappointing
results. Thus, another similar trial is envisaged to be unsuccessful. One of the key
recommendations of this study to the Government is to set up a specialist management
reform unit (SMRU) that would have a coordinating and leading role during the review
process of all agencies in Serbia.
The main role of this body would be to:
- Prepare an initial register containing all the existing agencies, and conduct an indepth analysis of agencies' jurisdictions, functions, and relevance;
- Assess whether their organizational form remain the most suitable way of
delivering public services;
- Propose appropriate organizational changes (merging, absorption, replacement
and abolition).
Apart from the need to have a body with clearly defined mandate and effective power, there are
two additional arguments for setting up this unit. First, neither the General Secretariat of the
Draft Analysis of agencies in the Republic of Serbia — Page 91
Government nor the Ministry of Justice and Public Administration have capacities to conduct
review and coordinate reform of agencies in Serbia. Of course, both bodies should have crucial
role during the review and reorganization processes, especially in terms of facilitating
consultations, providing feedback and other important inputs to the SMRU. Second, best
international practice shows that successful reforms were led by similar bodies. In fact, more
and more governments in the EU member states have set up one or more specialist
management reform units.119 Examples of such units are: the Prime Minister's Public Service
Delivery Unit in the UK, the Public Management Department of the Finnish Ministry of Finance,
the French Directorate General for State Modernization, the Norwegian Ministry of Government
Administration and Reform, etc.
To prevent possible negative consequences of setting up the SMRU as a political instrument for
distribution of political power, it is recommended to organize it as a temporary governmental
body that would exist for a certain period of time with a clear mandate and accountability
for its operations.
Box 21. Coordination between the SMRU and the General Secretariat
During the review process, the SMRU need to establish effective communication and cooperation with
ministries and agencies as the key stakeholders. The role of ministries would be to provide clear, precise,
detailed and comprehensive information on agencies under their scrutiny. But, the extent to which
ministries possess this data is rather limited. Hence, the General Secretariat who is responsible for overall
coordination of governmental policies, should ensure that all agencies under review cooperate with
relevant ministries and particularly with the SMRU.
The General Secretariat should offer a guideline to the ministries and agencies on how to communicate
with the coordinating body, conduct a meaningful consultation process and how the tests and criteria for
organizational changes should be applied by the SMRU. There is no reason that justifies rushing the
review process. Extra time would allow the SMRU to conduct measured and balanced reviews of
agencies, and also give the Government an opportunity to consider in detail which functions it is
necessary to retain.
Annex 10. in this study contains the transition guideline proposed by the Public Administration Select
Committee (UK House of Commons) for the purpose of reorganization of public bodies in the UK. It offers
key good practice principles for reorganization, and could be used by Serbian authorities when
reorganizing agencies in Serbia.
RECOMMENDATION: USE SPECIFIC AND CLEARLY DEFINED CRITERIA TO REVIEW THE
EXISTING AGENCIES' LANDSCAPE
It is of crucial importance to devise clear and comprehensive criteria for both creation of new
agencies and termination of existing agencies in Serbia. Here we present specific tests/criteria
on how to review agencies and make a decision if reorganization/abolition of specific
agencies is possible/appropriate/desirable. These criteria are based on the tests/criteria that
were used in the UK during the review of public bodies120, but are adapted to the Serbian
circumstances.
119
Pollitt, C. 30 Years of Public Management Reforms: Has there been a pattern? A background paper for
the World Bank consultation exercise, p. 4
120
House of Commons, Public Administration Select Committee (2010) Smaller Government: Shrinking
the Quango, State Fifth Report of Session 2010–11
Draft Analysis of agencies in the Republic of Serbia — Page 92
Particular attention during the creation of these criteria is devoted to the EU
requirements regarding regulatory tasks that need to be performed. Hence, to ensure
objective analysis, initial review should be focus rather on regulatory and executive tasks
performed by the existing agencies. Otherwise, focusing on other agency-level characteristics
(such as size in terms of number of employees, financial resources, etc.) might lead to abolition
of some tasks that the Republic of Serbia has to perform, especially given its aspirations
towards EU accession. The tests/criteria should be performed by the SMRU, following the
Flowchart attached in the Annex 9. The tests/criteria include:
a) Whether a function/task/activity needs to be performed ('existential' test);
The criterion is whether the tasks (performed by the agencies) are necessary for delivering
services of public interest and/or enabling activities of citizens and businesses. Existential test
should also take into the account the EU requirements with respect to the regulatory activities. If
the functions are needed to be performed, further tests should be used to determine whether the
function needs to be delivered outside the central government (ministries).
b) Whether specific function/task/activity is necessary and/or appropriate to be
performed independently ('impartiality' test or 'independence from the central
government' test)
This criterion asks whether there is a need for politically impartial decisions to be made during
execution of the tasks and/or whether a function/task is appropriate to be performed
independently from the ministries. If direct political control is neither necessary nor desirable (for
example, when tasks are related to determination of the facts in order to allow businesses and
citizens to perform specific activities (e.g. registration of businesses, issuing licenses, providing
grants, etc.), or when some technical operations need to be performed, then it is right to
delegate power to an independent body.
c) Whether current performance of existing body is satisfactory ('performance' test)?
If the purpose of an agency is confirmed following the implementation of the above mentioned
criteria, a further performance review should be conducted to establish whether agencies are
delivering against their responsibilities. This criterion actually measures aspects of factual
efficiency and effectiveness of existing agencies.
d) How specific function/task can be delivered most cost-effectively ('value for money'
test)?
The criterion is whether specific proposal for reorganization (merging, absorption, and/or
replacement) increases value for money in the future, that is, whether it might produce higher
level of efficiency and effectiveness in delivery of public tasks/services. Thus, it measures
potential future increases in efficiency and effectiveness of reorganization changes.
e) Whether jurisdictions and/or tasks of some agencies overlap ('functional overlapping'
test)?
The criterion is whether there is a duplication of tasks or similarity with other organizations. This
test is used just when analyzing executive tasks, as it is supposed that there is no functional
overlap between regulatory jurisdictions/tasks of different bodies (or it rarely happens).
Draft Analysis of agencies in the Republic of Serbia — Page 93
The tests/criteria for organizational changes must be applied consistently. Also, changes
proposed by the SMRU have to be based on detailed assessment of all relevant costs and
benefits, and positive and negative outcomes. Annex 13. shows which possible savings should
be included in the cost-benefit analysis of every reorganization proposal. Annex 11. shows
which possible positive and negative consequences, that is benefits and costs, could be
expected during the reorganization process.
Based on these criteria, the SMRU should also carry out an in-depth review of existing
public institutions at the national level and consider possible broadening of their scope
of work by transferring new tasks/public powers to them. In addition, the SMRU should
analyze possibilities for some of them to be merged, replaced, abolished and/or absorbed by
other public institutions. Finally, the SMRU should assess if it is possible to absorb existing
public institutions by existing agencies, and/or merge them if there are overlaps between their
jurisdictions/tasks. In doing so, the SMRU should produce a register of public institutions,
and utilize the above mentioned criteria.
RECOMMENDATION: AMEND OR ABOLISH THE LAW ON PUBLIC SERVICES
As discussed in the Subsection 2.1.2., some holders of delegated public powers are regulated
by the Law on Public Services, others are regulated by the Law on Public Agencies, while there
are also various hybrid agencies. Complicated legislative framework for delegating public
powers is one of the core causes of inefficient public administration in Serbia. Hence, clear and
comprehensive legal framework for establishment and operation of holders of delegated public
powers is necessary. There are at least two options:
Option 1:
- Improve and modernize the Law on Public Services, linking it to the Law on Public
Agencies and Law on Public Administration, and regulating all possible holders of delegated
public powers, their establishment, remits, functions, and termination;
Option 2:
- Abolish the Law on Public Services and Law on Public Agencies and introduce a
comprehensive law regulating public services (that might be also called 'public organizations')
and in particular: purpose of their establishment, possible jurisdictions, organizational forms,
management, appointments, status of civil servants working in these organizations, and
termination of these public services/organizations.
Adoption of any of these two options should result in the elimination of hybrid forms of
agencies, and in a clear and comprehensive legal framework for all holders of delegated
public powers.
The SMRU should help the ministry in charge of public administration in preparation of
the draft law on changing and amending the existing Law on Public Services, or a new
comprehensive Law on Public Services/Organizations.
Draft Analysis of agencies in the Republic of Serbia — Page 94
RECOMMENDATION: ABOLISH LEGAL INDEPENDENCE OF BODIES WITHIN MINISTRIES
As discussed in the Subsection 2.5.1., numerous agencies have used an opportunity to get legal
independence to increase their autonomy. However, the latest changes on the Budget System
Law (article 47(s3)) redirected agencies' own-source resources to the Budget of the Republic of
Serbia, decreasing financial autonomy of agencies. Thus, there is no obvious reason for some
groups of agencies to retain their current legal status. This refers primarily to the bodies
within ministries. Additional reason for abolishing their legal independence is the fact that this
kind of bodies has no legal independence in vast majority of EU countries.
However, special organizations that currently have a legal personality should retain it, due
to the nature of their functions and remits, but also because the Law on Public Administration
(article 33) grants them higher level of autonomy compared to bodies within ministries.
Obviously, independent regulatory bodies having a legal personality should retain it, primarily
because they are granted autonomy that is in the range of the autonomy of the Government
(which has legal entity). Finally, we suggest that public agencies should retain legal
independence because of the two reasons. First, they might sell goods and services in
the opened market, be treated as commercial or quasi-commercial organizations, or
receive and administer international donations and projects, so they might need to have
characteristics of legally independent bodies (e.g. accounts with commercial banks for
special purposes). Second, agencies of 'a regular type' in the EU countries, which
corresponds to Serbian public agencies, are often legally independent bodies.
Table 14. Which group of agencies should have legal personality?
Group of agencies
Government Services
Bodies within Ministries
Special Organizations
Public Agencies
Independent Regulatory
Bodies
Existing legal provisions
No
Yes, if prescribed by a special law
Yes, if prescribed by a special law
Yes
Yes, if prescribed by a special law
Should have legal personality?
No
No
Those who have it - should retain it
Yes
Those who have it - should retain it
RECOMMENDATION: CHANGE THE STATUS OF SOME SPECIAL ORGANIZATIONS INTO
THE BODIES WITHIN MINISTRIES
As indicated in the Subsection 2.5.1., it is not clear why some special organizations have such
status rather than a status of bodies within ministries. This is questionable especially when
specific special organizations do not perform regulatory tasks (e.g. Commissariat for Refugees
of the Republic of Serbia, or Republic Agency for Peaceful Settlement of Labor Dispute). The
fact that the Directorate for Inland Waterways121 has changed its status recently from special
organization into the body within a ministry proves that there are some special organizations that
could have a status of bodies within ministry.
121
On the basis of the Law on changes and amendments of the Law on Navigation and Ports on Inland
Waters ('Official Gazette', no. 121/12), the Directorate for Inland Waterways changed its organizational
form from special organization into the body within a ministry.
Draft Analysis of agencies in the Republic of Serbia — Page 95
Hence, we recommend that all special organizations that do not perform regulatory
activities and/or some professional tasks that entail specific knowledge and skills, but
rather conduct administrative and/or executive tasks, to become bodies within ministries.
These changes in organizational form in specific cases imply decrease in the autonomy, but
would also ensure better control and increased accountability of these bodies, and public
savings at the same time. Finally, it is a tendency that the governments across the globe regain
control over agencies keeping them closer to the governments.
RECOMMENDATION: STRENGTHEN SCRUTINY OVER SPECIAL ORGANIZATIONS
As suggested in the Section 2.7., some special organizations report to relevant ministries, while
some of them report to the Government. Additionally, it is questionable to what extent control
over special organizations is effective in practice, given the unclear and arbitrarily legal
provisions in the Law on Public Administration (article 50). Hence, article 50 of the Law on
Public Administration should be amended in such a way that prescribes stricter control over
special organizations.
There are two options that could ensure better scrutiny over special organizations.
Option 1:
- Arrange that all special organizations are supervised by competent ministries. For
example, in Western Europe it is unusual for this kind of bodies to be directly responsible to the
government rather than a ministry. Even when this kind of an arrangement exists, there is a
ministry that takes care of the practical administration of such bodies on behalf of the
government. Insofar as there is a close connection between one or more ministries and these
organizations, the latter should be supervised by the ministry to which they are most closely
related.
Option 2:
- Arrange that all special organizations are supervised by the Government. First argument
for this is that the level of autonomy of special organizations is similar to the level of autonomy of
ministries. Second one is the fact that scope of tasks of special organizations is similar
compared to the tasks of ministries (with the difference that tasks of special organizations are
narrower to some extent, and entail specific knowledge and professional skills). Given this, the
Government may scrutinize special organizations as it scrutinizes ministries.
We suggest first option as preferable one, as control over special organizations may be more
effective if parent ministries are oversight bodies.
RECOMMENDATION: ENSURE THAT PUBLIC AGENCIES ARE ESTABLISHED BY LAW
As specified in the Section 2.5.1., the opportunity allowed by the Law on Public Agencies to
establish public agencies on the basis of regulation have led to excessive creation of public
agencies, because it is much easier to establish public agency by regulation than to accomplish
it by making and adopting law. In order to prevent similar future trials, it is necessary to change
the Law on Public Agencies and prescribe that public agency may be established just by law.
Draft Analysis of agencies in the Republic of Serbia — Page 96
RECOMMENDATION: CHANGE THE STATUS OF SOME PUBLIC AGENCIES INTO THE
SPECIAL ORGANIZATIONS
As already pointed out, it is not clear why some agencies have their current organizational form
(level of autonomy), instead to be closer to the central government. Accordingly, it is not always
clear why some public agencies have such status rather than a status of special organizations.
This is especially not clear when some public agencies are delegated to perform the tasks that
could be executed by the state administration authorities such as special organizations. Namely,
as specified in the Table 1. in the Subsection 2.1.2., public agencies may be established for
execution of the tasks that have same nature as the tasks performed by special organizations
(e.g. professional, analytical and related executive tasks, regulatory tasks and implementation of
regulation through administrative procedure, etc.), if they do not entail continual and direct
political control and if they can be more efficient. Nevertheless, this Study showed that both
principles - impartiality and efficiency of public agencies may be questioned in practice.
Hence, public agencies that perform tasks of same nature as special organizations, should
become special organizations. In doing so, they would still have adequate level of autonomy, but
will be a part of the state administration apparatus, which will inevitably lead to the reduction of
budgetary resources provided for performing public powers in the Republic of Serbia and
increased accountability of these agencies.
RECOMMENDATION: USE APPROPRIATE NAMES TO REFLECT ORGANIZATIONAL
FORMS OF AGENCIES
As discussed in the Section 2.3., names of agencies and their organizational forms do not
correspond in many cases. In order to eliminate current confusion, it is necessary to use
appropriate names to reflect organizational form of agencies. Table 15. offers a possible
framework for naming of specific types of agencies.
Table 15. Framework for naming of types of agencies
Organizational Form
Bodies within the Ministries
Special Organizations
Public Agencies
Independent Regulatory Bodies
Government Services
What agencies' name should include
Administration / Inspectorate / Directorate
Republic Secretariat / Republic Bureau122
123
Public Agency + of the Republic of Serbia
Republic or National Agency / Commission / Council /
Ombudsman / Commissioner , etc.
Office / Service / Secretariat / Coordination Body
122
Special organizations should have 'republic' at the beginning of their names, as pursuant to the Law on
Public Administration, secretariats and bureaus may also be established by the local self-governments
and autonomous provinces. Hence, the difference between republic and local special organizations has to
be obvious in the name of these organizations.
123
The difference between public agencies and other agencies (e.g. private and local ones) has to be
obvious in their names, so all public agencies should have 'public' at the beginning of their names. In
addition, at the end of the name of public agencies should be 'of the Republic of Serbia' in order to make a
difference between republic public agencies and agencies at the local level.
Draft Analysis of agencies in the Republic of Serbia — Page 97
RECOMMENDATION: CAREFULLY EXAMINE WHICH TASKS COULD BE TRANSFERRED
TO OTHER PUBLIC BODIES SUCH AS ASSOCIATIONS, CHAMBERS, ALLIANCES, FUNDS
AND FOUNDATIONS
The extent to which other public bodies using public resources and performing tasks/functions of
public interest (such as associations, chambers, alliances, funds and foundations) might be
transferred more specific tasks of public interest, should be carefully assessed. Using their ownsource resources and budgetary resources they have got for performing tasks of public interest,
and transferring regulation and scrutiny costs to them could be much more efficient and flexible
option than the creation of new agencies/other public bodies. This also could provide higher
level of compliance with the standards set out in a specific area. However, the practice so far
has shown that once these bodies are delegated execution of public tasks, it is hard to
control them. Also, possible sanctions in the case they underperform, or do not perform public
tasks properly, are rarely used (and ineffective). Moreover, they often impose additional barriers
to entry, preventing new interested parties from easily entering an industry and/or area of
business.
Hence, the SMRU should make an initial register of other public bodies first, and then conduct
an in-depth analysis which tasks could be transferred to them.
Finally, public-private partnerships are an additional option for performing tasks of public
interest in a more cost-effective way.124 The extent to which it is possible to delegate public
powers to some private entities also should be assessed in detail by the SMRU. What is the
most important here is to create an appropriate mechanism for scrutiny of private entities that
would be holders of delegated public authority.
RECOMMENDATION: OBLIGE MINISTRIES TO PUBLISH LISTS OF ALL BODIES UNDER
THEIR AUSPICES
As mentioned in the Subsection 2.5.2., ministries do not publish on their websites lists of bodies
under their auspices, nor the National Parliament keep a list of existing independent regulatory
bodies on its website. However, in order to ensure transparency, the ministries and the
National Parliament should publish and keep up-to-date lists of bodies under their
scrutiny. This could be modeled on the practice in developed countries (e.g. in the UK where
list of public bodies has been published annually since 1980 125).
124
In Serbia, public-private partnerships have recently become more popular in such areas as
environmental protection or health, but are much more used as an alternative in other countries.
125
Cabinet Office (2009) Public Bodies 2009
Draft Analysis of agencies in the Republic of Serbia — Page 98
RECOMMENDATION: ABOLISH AGENCIES THAT ARE NOT OPERATIONAL IN PRACTICE
As elaborated, there are agencies founded by relevant legislation, however, they have never
become operational in practice. Moreover, there were cases when budgetary resources were
reserved for such agencies. In order to ensure clearer landscape of agencies, and transparent
usage of budgetary resources, it is important to abolish those agencies.
5.2.
DEALING WITH THE FLOW - MECHANISMS FOR PREVENTION
ADMINISTRATIVE STRUCTURE FROM FURTHER AGENCY PROLIFERATION
OF
After the one-off reform of agencies carried out by the SMRU with the help of other
stakeholders, the Serbian Government has to prevent further agency proliferation. This is
especially important given the EU recommendations for strengthening institutional and
administrative structures for implementing the Acquis that might be interpreted as EU requests.
Recommendations offered in this section represent an ex-ante tool to prevent unnecessary
establishment of new agencies.
RECOMMENDATION: INTRODUCE A CONTROL MECHANISM FOR ESTABLISHMENT OF
NEW AGENCIES AND OTHER PUBLIC BODIES
The Serbian Government needs powerful control mechanism to slow down the peace at which
new agencies are established. New agencies and other public bodies must not be established
every time when state authorities proposes setting up new remit or jurisdiction, or argue that it
has to be carried out by body having higher degree of autonomy compared to state
administration authorities. Rather, every proposal for establishment of a new agency or
other public body has to be based on detailed financial plan, assessment of its
sustainability and impact assessment on businesses and citizens. It should also contain
an identification and explanation of the EU regulation/requests if applicable. Financial
plans and necessary explanations should take a form of separate annexes to the draft
laws envisaging establishment of a new agency or other public body (such as statement
of compliance with EU legislation), while impact assessment may be a part of a general
regulatory impact assessment statement. Annex 12. offers possible financial plan form.
However, particular attention should be given to the future revenues and expenditures. Financial
plans should provide an insight into how specific agency will be financing its operations in the
future.126
At least three approvals are necessary to be obtained if a new agency is to be established.
The first one should be issued by the ministry in charge of finance and is related to the possible
(positive and negative) financial consequences of such a proposal on the budgetary resources.
The ministry in charge of finance should utilize the value for money test, assessing if a
126
This is of crucial importance when it is argued that new agency will be financed by donors' financial
resources. There were several cases in Serbia when new agencies were established under the
justification that they would be financed by donors' resources; however, they were finances using
budgetary resources also (e.g. Energy Efficiency Agency).
Draft Analysis of agencies in the Republic of Serbia — Page 99
new agency or other public body would contribute to the Governmental objectives in an
efficient and effective manner. The second approval should be issued by the SMRU on a
substantial need for establishment of a new agency or other public body. Once the SMRU's
mandate expires, the General Secretariat which coordinates public policies across the
Government should take over this role. The SMRU/General Secretariat should utilize the
existential, impartiality, and functional overlapping tests when issuing an approval.
Finally, the Office for Regulatory Reform and Regulatory Impact Assessment should issue
its opinion within its regular remits on whether establishment of a new agency would
result in unnecessary costs and administrative procedures for businesses and citizens.
Although financial outcomes on the Budget and possible impacts on the businesses and citizens
are closely related, we consider that these two impact assessments should be given separate
attention.
New agency or other public body should be set up only when it is clearly demonstrated that:
- Proposed model of separate agency or other public body is the most efficient and
cost-effective model to deliver public function/task/activity/service;
- There is no such or similar agency or other public body performing same/similar
tasks and/or having similar/same jurisdictions;
- New agency or other public body proposed will not impose additional/unnecessary
financial and/or administrative burdens to the businesses and citizens;
- Performing of regulatory and/or control tasks that are explicitly requested by the EU
is necessary to be performed independently (the case of new independent regulatory
bodies).
In all other cases, necessary functions should be performed by the existing regulatory
and administrative infrastructure.
In addition, all existing laws that prescribe establishment of new agencies that have not
become operational yet (e.g. Law on Youth ('Official Gazette', no. 50/2011)) should be
reviewed and exposed to the control mechanism described above. In addition, all law
proposals adopted by the Government that have not been subject to the parliamentary
discussion yet, and all draft laws that are being made at the moment, should be reviewed
in order to find out if some of them envisage establishment of new agencies and other
public bodies; if yes, they should be expose to the control mechanism formulated above.
Financial plans and other necessary explanations must be provided also in the cases of
reorganization of existing agencies, that is - whenever new body is created on the basis of
mergers, absorptions, and/or replacements.
RECOMMENDATION: INTRODUCE REGULAR REVIEWS OF EXISTING AGENCIES TO
DETERMINE POSSIBLE REORGANIZATION MEASURES
It is necessary to conduct periodic reviews of agencies (for example, two to three-year reviews)
in order to check whether: 1) existing organizational forms remain the most suitable way of
delivering public services, 2) the circumstances which led to their creation have changed, and/or
3) if some rationalization might be useful in the light of changing citizens’ needs, requirements
and expectations, changes in the overall sectoral strategy, or changes in policy. Regular reviews
of agencies would ensure that:
Draft Analysis of agencies in the Republic of Serbia — Page 100
-
Agencies still serve a useful purpose and deliver against their responsibilities;
The previous pattern of agencies outliving the purpose for which they were
established will not be repeated, and
Lines of responsibility between agencies and their sponsor/parent ministries are
much clearer.
However, managing of this kind of reforms represents a huge challenge in the public sector,
because of the huge scale of reform and a general lack of expertise in the public sector
organizations. Hence it is of crucial importance to assign this task to the body that is capable of
doing it properly. We consider that the SMRU should have responsibility for conducting and
reporting (to the Government) on these cyclical reviews during its mandate, with the help
of the General Secretariat. The SMRU should also provide trainings to the General
Secretariat/parent ministries on how to do these reviews after the SMRU's mandate expires.
After that, we suggest that the General Secretariat should take the SMRU's role in conducting
regular reviews of agencies, with substantial help from ministries that scrutinizes agencies. The
reviews should also include external inputs, such as parliamentary inputs.
RECOMMENDATION: INTRODUCE 'SUNSET CLAUSES', ESPECIALLY FOR TEMPORARY
AND AD HOC PUBLIC BODIES
The one-off rationalization and regular reviews of agencies would ensure that unnecessary
agencies are abolished, merged, absorbed and/or replaced. Nevertheless, it is important to
incorporate the institution of 'sunset clauses' into the future pieces of legislation
prescribing establishment of new public agencies, but also in other cases whenever it
might be useful. In the former case, this would be beneficial if it is already known that the
rationale for establishment of public agency might cease to exist. In the later case, introduction
of the 'sunset clauses' would ensure that it is possible to abolish specific agency when other
entity becomes able to fulfill the purpose of the agency in a more efficient and effective way.
Finally, whenever it comes to setting up a temporary and/or ad hoc body such as council,
coordinative body, commission and/or similar, the institution of 'sunset clauses' must be
incorporated into the legislation. In all these cases, newly established agencies cease to exist
after a predetermined date, unless their mandate is specifically renewed.
5.3.
DEALING WITH THE QUALITY OF AGENCIES' PERFORMANCE AND SERVICE
DELIVERY
RECOMMENDATION: INTRODUCE PERFORMANCE MANAGEMENT INDICATORS IN
AGENCIES
As indicated in the Section 2.6., performance management in terms of the principles of
efficiency and effectiveness does not exist in Serbian agencies. Hence, we consider
Draft Analysis of agencies in the Republic of Serbia — Page 101
introduction of performance measures into the day-to-day operations of agencies in
Serbia as crucial aspect of reform of agencies.
Introduction of performance management indicators would enable getting control over some
activities of agencies that provide questionable benefit to the taxpayers (e.g. the use of public
funds for lobbying and public relations campaigns). It would strengthen overall ex-post control of
agencies, and consequently, increase their accountability, efficiency and effectiveness. Simply
put, if performance management indicators were set out, political principals would be much
more interested to see the exact results and measurable performance of agencies. This is
particularly important for agencies that are under direct political scrutiny, such as Government
offices, bodies within ministries, and special organizations. Moreover, public agencies
(especially those performing executive tasks) are the most suitable for this kind of reform.
Performance indicators might be easily implemented in agencies that manage different projects
and/or distribute financial resources obtained from international donors to the third parties (e.g.
non-governmental bodies, companies, etc.). Performance management indicators here might
include - number of projects initiated/recognized/financed annually.
Finally, it is of crucial importance to improve existing way of reporting of agencies to their
superiors. Agencies have to report effectively and precisely on their performances, if they want
to use budgetary resources.
RECOMMENDATION: STRENGTHEN FINANCIAL CONTROL OVER AGENCIES
As already discussed, the Government of Serbia undertook a range of activities to take better
control over revenues of agencies. Also, some improvements have been made with respect to
the expenditures of agencies, as the latest changes of the Budget System Law prescribed
strengthening financial control of agencies.
Still, we recommend implementing these initiatives in practice as soon as possible, if
necessary cuts in expenditures of agencies and overall control over their revenues and
expenditures are to be achieved. Moreover, we suggest strengthening the role and
capacities of independent regulatory bodies that are financial controllers such as State
Audit Institution and Fiscal Council.
RECOMMENDATION: ABOLISH MANAGEMENT BOARDS OF PUBLIC AGENCIES
Legal provisions in the Law on Public Agencies (articles 13-20 and 30-32) are very robust in
relation to the number, skills, appointments and dismissal of management boards' members and
their duties. Although the institution of management boards represents granting structural
autonomy to public agencies by insertion of an alternative level of political supervision, this
institution has shown several shortcomings in practice. Their role in the execution of factual
control over directors, level of independence of management boards' members from political
influences, and great number of management boards' members that complicate control over the
directors, may be questioned.
Draft Analysis of agencies in the Republic of Serbia — Page 102
Hence, it is important to simplify the governance structures in public agencies, including
the abolition of management boards to provide for clearer lines of responsibility.127 The
tasks performed by management boards may be executed by directors (i.e. adoption of
regulation and other general public agency' acts), and the Government Human Resource
Management Service (i.e. conducting public job competitions for directors). Control over public
agencies could be left completely to parent ministries and the Government, whereas public
agency's director would report directly to ministers/Prime Minister on performance against
targets. Governance structure in public agencies may be modeled on the basis of the
governance structure in Government services, where directors are main organs.
RECOMMENDATION: MAKE A REFORM OF EMPLOYMENT CONDITIONS AND SALARIES
IN AGENCIES
There are at least two alternative solutions for solving the issues of overstaffed agencies and
uneven salaries per group of tasks. One of them is to employ and pay all employees
performing administrative tasks and making decision in the administrative procedure in
agencies as civil servants. In this case, experts and professionals performing strictly
professional work could be employed on the basis of the Labor Law, while the level of their
salaries should be a subject of approval by the Government or ministry in charge of finance.
Another option is to make all people working in agencies civil servants, and alternatively,
prescribe some exemptions by changing and amending the Law on Civil Servants and
Appointees and Law on Salaries of Civil Servants and Appointees, on the basis of clear
arguments and criteria.
Both solutions entail equalization of salary groups and salary grades regulated by the Law on
Salaries of Civil Servants and Appointees. Hence, we suggest introduction of the system of
grade levels (12 to 15) which would, in a systematic and consistent way, deal with the issue of
the level of salaries for similar positions in different state administration authorities and
agencies.
RECOMMENDATION: ENSURE FULL IMPLEMENTATION OF THE LABOR LAW IN THE
PUBLIC SECTOR
As indicated in the Subsection 2.5.3., there is a significant number of people employed in
ministries and agencies on the basis of the Labor Law (instead on the basis of the Law on Civil
Servants and Appointees). This is so because the articles 197-199 of the Labor Law that
regulates temporary and periodical work, and special service contracts, respectively, are
often abused in practice, and result in the violation of the Law on Maximum Number of
Employees in the Public Administration in Serbia. Hence, it is necessary to ensure full
implementation of these two laws, thorough inspection of the implementation, as well as
strengthening the role and control by the State Audit Institution and internal audit in agencies.
127
The Irish government also implemented this aspect of agencies' reform.
Draft Analysis of agencies in the Republic of Serbia — Page 103
RECOMMENDATION: NARROW THE REQUIREMENTS ON SPECIFIC EXPERIENCE FOR
MANAGERIAL POSITIONS IN AGENCIES
In order to prevent agencies and overall public sector from negative selection of cadre,
especially managers and directors, it is important to narrow the requirements that need to be
fulfilled for these important positions. Requirements on specific experience (experience
in particular field) has to be incorporated into the Law on Public Administration (articles 3031 and 35-37), and the Law on Civil Servants and Appointees (articles 33-34, 69), and worked
out in the Law on Public Agencies (article 22).
RECOMMENDATION: ENABLE EXTENSIVE SHARING OF BACK-OFFICE FUNCTIONS
The pressure to reassert central control over the work and expenditure of agencies has been
vigorously renewed. For example, the multiplication of management support and corporate
functions such as HR and IT across dozens of agencies has come in for particular criticism
across the countries. Sharing of back-office administrative functions (e.g. HR, payroll,
procurement, etc.) and other services have the potential to transform the competitiveness of
agencies, offering significant long term savings in their operations generally. The UK and the
Ireland, as well as some other countries have introduced this aspect of public bodies' reform.
In Serbia, there is a good practice concerning HR, IT and catering functions/services that are
jointly provided to republic bodies by one central governmental service such as Joint Services
Administration of the Republic Bodies. At the moment, there are also some initiatives towards
integration of small value public procurements of all republic bodies. However, some agencies
still use separate services of IT, catering and other others paying for it separately, rather than to
get them throughout the centralized system of joint services. Hence, we recommend enabling
extensive sharing of back-office administrative functions/services and strengthening
control over all back-office functions/services - not just for already mentioned services, but
for all possible additional functions such as accounting, using vehicles, cleaning, IT equipment
maintenance, even renting. Significant savings are feasible in various segments of expenses
concerning these services.
RECOMMENDATION: INTRODUCE POSTGRADUATE COURSE ON PUBLIC
ADMINISTRATION/PUBLIC POLICY INTO THE UNIVERSITY CURRICULUM
The only component of public administration reform so far that has been successful refers to the
informal civil servants education. However, adequate formal education of future civil
servants and people willing to work in the state administration is missing. Namely, there is
no adequate and complete postgraduate course in Serbia related to Public Administration and/or
Public Policy, while it exists almost in all European countries, and even other Balkan countries
(e.g. Montenegro, Bosnia and Herzegovina, Croatia).
Hence, it is necessary to change existing university curriculum and introduce
postgraduate (at least MSc or MA) course on Public Administration and/or Public Policy
at Serbian state universities as soon as possible. These courses should be designed to
Draft Analysis of agencies in the Republic of Serbia — Page 104
equip local professionals with knowledge and skills to deal with public sector reforms and
reorganization of agencies in the future, acting as leaders in resolving current issues and
challenges and finishing unfinished public sector reforms.
Draft Analysis of agencies in the Republic of Serbia — Page 105
ANNEXES
ANNEX 1. LIST OF AGENCIES
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Name of Public Power
Holder
Office for Cooperation With
the Media
Human Resource
Management Service
Office of National Council
for Cooperation with the
International War Crimes
Tribunal
Office of Sustainable
Development Undeveloped
Areas
Coordination Body for the
Municipalities of Presevo,
Bujanovac and Medvedja
Office of the Council on
National Security and
Classified Information
Protection
Office for Cooperation With
Civil Society
Office for Regulatory
Reform and Regulatory
Impact Assessment
Office for the Revision of
the EU Funds Management
System
Office of the Professional
and Operational Tasks in
the Negotiating Process
EU Integration Office
Office for Kosovo and
Metohija
Office for Human and
Minority Rights
Office for Cooperation with
Diaspora and Serbs from
the Region
Office for Cooperation with
Churches and Religious
Communities
Government Air Service
General Secretariat of
Government
Administration for Joint
Services of the Republic
Bodies
Organizational
Form
Government
Service
Government
Service
Serbian Government
2005
Serbian Government
2005
Government
Service
Serbian Government
2004
Government
Service
Serbian Government
2008
Government
Service
Serbian Government
2000
Government
Service
Serbian Government
2009
Government
Service
Serbian Government
2010
Government
Service
Serbian Government
2010
Government
Service
Serbian Government
2011
Government
Service
Serbian Government
2011
Serbian Government
2004
Serbian Government
2012
Serbian Government
2012
Government
Service
Serbian Government
2012
Government
Service
Serbian Government
2012
Serbian Government
1965
Serbian Government
2005
Serbian Government
1983
Government
Service
Government
Service
Government
Service
Government
Service
Government
Service
Government
Service
Scrutiny Body
Year of
Establishment
Draft Analysis of agencies in the Republic of Serbia — Page 106
19
Tax Administration
20
Customs Administration
21
Treasury Administration
22
Public Debt Administration
23
Tobacco Administration
24
25
26
27
Administration for the
Prevention of Money
Laundering
Free Economic Zones
Administration
Directorate of Measures
and Precious Metals
Commission for State Aid
Control
Body within the
Ministry
Body within the
Ministry
Body within the
Ministry
Body within the
Ministry
Body within the
Ministry
Ministry of Finance and
Economy
Ministry of Finance and
Economy
Ministry of Finance and
Economy
Ministry of Finance and
Economy
Ministry of Finance and
Economy
Body within the
Ministry
Ministry of Finance and
Economy
Body within the
Ministry
Body within the
Ministry
Body within the
Ministry
Ministry of Finance and
Economy
Ministry of Finance and
Economy
Ministry of Finance and
Economy
National Assembly of the
Republic of Serbia and
Ministry of Defense
National Assembly of the
Republic of Serbia and
Ministry of Defense
2005
2005
2005
2009
2005
2005
2008
2007
2009
28
Military Security Agency
Body within the
Ministry
29
Military Intelligence Agency
Body within the
Ministry
30
Defense Inspectorate
Body within the
Ministry
Ministry of Defense
1911
31
Directorate for the
Management of Seized
Assets
Body within the
Ministry
Ministry of Justice and
Public Administration
2008
32
Administrative Inspectorate
Body within the
Ministry
Body within the
Ministry
Ministry of Justice and
Public Administration
Ministry of Justice and
Public Administration
Body within the
Ministry
Ministry of Transport
2010
Ministry of Transport
1949
Ministry of Transport
1951
33
34
35
36
Directorate for Enforcement
for Prison Sanctions
Administration for the
Transport of Dangerous
Cargo
Authority for Determination
of the Seaworthiness
Directorate for Inland
Waterways
Body within the
Ministry
Body within the
Ministry
37
Veterinary Directorate
Body within the
Ministry
38
Administration of Forests
Body within the
Ministry
39
Plant Protection Directorate
Body within the
Ministry
40
Directorate for National
Reference Laboratories
Body within the
Ministry
41
Directorate for Water
Body within the
Ministry
42
Directorate for Agrarian
Payments
Body within the
Ministry
Ministry of Agriculture,
Forestry and Water
Management
Ministry of Agriculture,
Forestry and Water
Management
Ministry of Agriculture,
Forestry and Water
Management
Ministry of Agriculture,
Forestry and Water
Management
Ministry of Agriculture,
Forestry and Water
Management
Ministry of Agriculture,
Forestry and Water
Management
Draft Analysis of agencies in the Republic of Serbia — Page 107
2003
2006
2008
2005
2004
2002
2004
2009
2002
2009
43
Directorate for Agricultural
Land
Body within the
Ministry
Ministry of Agriculture,
Forestry and Water
Management
2006
44
Biomedicine Administration
Body within the
Ministry
Ministry of Health
2009
45
Occupational Safety and
Health Directorate
Body within the
Ministry
46
Directorate of Gender
Equality
Body within the
Ministry
47
Labor Inspectorate
Body within the
Ministry
48
Digital Agenda
Administration
Body within the
Ministry
49
Environmental Protection
Agency
Body within the
Ministry
Republic Secretariat for
Legislation
Statistical Office of the
Republic of Serbia
Seismological Survey of
Serbia
Security Information
Agency
Republic Directorate for
Assets of the Republic of
Serbia
Special
Organization
Special
Organization
Special
Organization
Special
Organization
50
51
52
53
54
Ministry of Labor,
Employment and Social
Policy
Ministry of Labor,
Employment and Social
Policy
Ministry of Labor,
Employment and Social
Policy
Ministry of Foreign and
Internal Trade and
Telecommunications
Ministry of Energy,
Development and
Environmental Protection
2005
2008
2007
2011
2004
Serbian Government
1991
Serbian Government
1945
Serbian Government
1995
Serbian Government
2002
Special
Organization
Ministry of Finance and
Economy
1996
Special
Organization
Special
Organization
Ministry of Finance and
Economy
Ministry of Construction
and Urban Planning
Ministry of Energy,
Development and
Environmental Protection
Ministry of Energy,
Development and
Environmental Protection
Ministry of Education,
Science and
Technological
Development
Ministry of Labor,
Employment and Social
Policy
Ministry of Labor,
Employment and Social
Policy
Ministry of Labor,
Employment and Social
Policy
55
Public Procurement Office
56
Republic Geodetic Authority
57
Geology Institute of Serbia
Special
Organization
58
Republic
Hydrometeorological
Service of Serbia
Special
Organization
59
Intellectual Property Office
of the Republic of Serbia
Special
Organization
60
Institute for Social
Insurance
Special
Organization
61
Republic Agency for
Peaceful Settlement of
Labor Dispute
Special
Organization
62
Central Registry of
Mandatory Social Insurance
Special
Organization
63
Directorate for Railways
Special
Organization
Ministry of Transport
2005
64
Republic Directorate for
Commodity Reserves
Special
Organization
Ministry of Foreign and
Internal Trade and
Telecommunications
1992
Draft Analysis of agencies in the Republic of Serbia — Page 108
2002
1992
2011
1947
1920
1950
2004
2010
65
66
Mine Action Centre
Commissariat for Refugees
of the Republic of Serbia
Bankruptcy Supervision
Agency
Special
Organization
Special
Organization
Ministry of Interior
2004
Ministry of Interior
1992
72
Agency for Restitution
Public Agency
73
74
Road Traffic Safety Agency
Ports Management Agency
Civil Aviation Directorate of
the Republic of Serbia
Medicines and Medical
Devices Agency of Serbia
Agency for Accreditation of
Health Care Institutions of
Serbia
Public Agency
Public Agency
Ministry of Finance and
Economy
Ministry of Finance and
Economy
Ministry of Finance and
Economy
Ministry of Finance and
Economy
Ministry of Finance and
Economy
Ministry of Finance and
Economy
Ministry of Transport
Ministry of Transport
Public Agency
Ministry of Transport
2003
Public Agency
Ministry of Health
2004
Public Agency
Ministry of Health
2008
67
Public Agency
68
Deposit Insurance Agency
Public Agency
69
Privatization Agency
Public Agency
70
71
75
76
77
Serbian Business Registers
Agency
Serbia Investment and
Export Promotion Agency
Public Agency
Public Agency
78
Republic Agency for Spatial
Planning
Public Agency
79
National Agency for
Regional Development
Public Agency
80
Agency for Ionizing
Radiation and Nuclear
Safety of the Republic of
Serbia
Public Agency
81
Republic Housing Agency
Public Agency
82
Republic Agency for
Electronic Communications
Independent
Regulatory Body
83
Ombudsman
84
State Audit Institution
85
Republic Electoral
Commission
86
Anti-corruption Agency
87
88
89
90
Commissioner for
Information of Public
Importance and Personal
Data Protection
Commissioner for
Protection of Equality
Commission for Protection
of Competition
Commission for the
Examination Responsibility
for Violation of Human
Ministry of Natural
Resources, Mining and
Spatial Planning
Ministry of Regional
Development and Local
Self-government
Ministry of Energy,
Development and
Environmental Protection
Independent
Regulatory Body
Independent
Regulatory Body
Independent
Regulatory Body
Independent
Regulatory Body
Ministry of Construction
and Urban Planning
Ministry of Foreign and
Internal Trade and
Telecommunications
National Assembly of the
Republic of Serbia
National Assembly of the
Republic of Serbia
National Assembly of the
Republic of Serbia
National Assembly of the
Republic of Serbia
Independent
Regulatory Body
National Assembly of the
Republic of Serbia
Independent
Regulatory Body
Independent
Regulatory Body
National Assembly of the
Republic of Serbia
National Assembly of the
Republic of Serbia
Independent
Regulatory Body
National Assembly of the
Republic of Serbia
Draft Analysis of agencies in the Republic of Serbia — Page 109
2004
2005
2001
2004
2001
2011
2009
2011
2003
2001
2009
2011
2003
2005
2005
2000
2008
2004
2009
2005
2003
Rights
91
92
93
94
95
96
97
98
Commission for
Implementation of the
Program of Protection
Republic Commission for
the Protection of Rights in
Public Procurement
Procedures
Securities Commission
National Council for Higher
Education
Republic Broadcasting
Agency
Fiscal Council
Energy Agency of the
Republic of Serbia
Republic Agency for Postal
Services
99
State Prosecutors
100
Public Prosecution Office
101
102
Prosecution Office for War
Crimes
Prosecution Office for
Organized Crimes
103
National Bank of Serbia
104
High Judicial Council
105
106
107
Social and Economic
Council of the Republic of
Serbia
Public Attorney's Office of
the Republic of Serbia
Anti-corruption Council
Independent
Regulatory Body
National Assembly of the
Republic of Serbia
2005
Independent
Regulatory Body
National Assembly of the
Republic of Serbia
2008
Independent
Regulatory Body
Independent
Regulatory Body
Independent
Regulatory Body
Independent
Regulatory Body
Independent
Regulatory Body
Independent
Regulatory Body
Independent
Regulatory Body
Independent
Regulatory Body
Independent
Regulatory Body
Independent
Regulatory Body
Independent
Regulatory Body
Independent
Regulatory Body
National Assembly of the
Republic of Serbia
National Assembly of the
Republic of Serbia
National Assembly of the
Republic of Serbia
National Assembly of the
Republic of Serbia
National Assembly of the
Republic of Serbia
National Assembly of the
Republic of Serbia
National Assembly of the
Republic of Serbia
National Assembly of the
Republic of Serbia
National Assembly of the
Republic of Serbia
National Assembly of the
Republic of Serbia
National Assembly of the
Republic of Serbia
National Assembly of the
Republic of Serbia
Independent
Regulatory Body
Serbian Government
2004
Serbian Government
1934
Serbian Government
2001
Independent
Regulatory Body
Advisory Body
Draft Analysis of agencies in the Republic of Serbia — Page 110
1990
2005
2003
2010
2005
2005
2008
2008
2003
2008
1884
2009
ANNEX 2. LIST OF AGENCIES CONTACTED ON THE BASIS OF THE LAW ON FREE
ACCESS TO INFORMATION OF PUBLIC IMPORTANCE
No.
1
2
3
Replied
(Yes / No)
Type of data received
Tobacco Administration
Administration for the Preventing of Money
Laundering
Free Economic Zones Administration
Yes
Referred to their web site
Directorate of Measures and Precious Metals
Office for Human and Minority Rights
Directorate for the Management of Seized Assets
Administration for the Transport of Dangerous Cargo
Authority for Determination of the Seaworthiness
Veterinary Directorate
Administration of Forests
Plant Protection Directorate
Directorate for National Reference Laboratories
Directorate for Water
Directorate for Agrarian Payments
Directorate for Agricultural Land
Biomedicine Administration
Environmental Protection Agency
Occupational Safety and Health Directorate
Directorate of Gender Equality
Digital Agenda Administration
Bankruptcy Supervision Agency
Deposit Insurance Agency
Privatization Agency
Serbian Business Registers Agency
Road Traffic Safety Agency
Medicines and Medical Devices Agency of Serbia
Republic Agency for Spatial Planning
Ports Management Agency
National Agency for Regional Development
Serbia Investment and Export Promotion Agency
Agency for Ionizing Radiation and Nuclear Safety of
the Republic of Serbia
Civil Aviation Directorate of the Republic of Serbia
Agency for Accreditation of Health Care Institutions
of Serbia
Republic Housing Agency
Republic Directorate for Commodity Reserves
Republic Geodetic Authority
Republic Directorate for Assets of the Republic of
Serbia
Mine Action Centre
Intellectual Property Office of the Republic of Serbia
Institute for Social Insurance
Directorate for Inland Waterways
Public Procurement Office
Seismological Survey of Serbia
Directorate for Railways
Yes
No
Yes
Yes
No
Yes
No
Yes
Yes
Yes
No
Yes
No
Yes
Yes
No
Yes
No
Yes
Yes
Yes
Yes
Yes
No
Yes
No
No
Agencies
No
Yes
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
Referred to their web site
Delivered all the
information:
Revenues/Expenditures/
Employees
Revenues/Employees
All
Request rejected
Employees
Employees
Employees
All
All
Revenues/Employees
All
Referred to their web site
Revenues/Expenditures
All
Revenues/Employees
All
All
No
No
Yes
No
No
No
No
No
No
No
Yes
Yes
Yes
Yes
Revenues/Employees
All
Revenues/Employees
Referred to their web site
Referred to their web site
Draft Analysis of agencies in the Republic of Serbia — Page 111
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
Republic Agency for Peaceful Settlement of Labor
Dispute
Office of Sustainable Development Undeveloped
Areas
Office for Regulatory Reform and Regulatory Impact
Assessment
EU Integration Office
Government Air Service
Anti-Corruption Agency
Commission for Protection of Competition
Republic Commission for the Protection of Rights in
Public Procurement Procedures
Securities Commission
Republic Agency for Electronic Telecommunications
Republic Broadcasting Agency
Customs Administrations
Tax Administration
Treasury Administration
Public Debt Administration
Central Registry of Mandatory Social Insurance
Office for Cooperation with Civil Society
Social and Economic Council of the Republic of
Serbia
Fiscal Council
Anti-Corruption Council
Agency for Restitution
Energy Agency of the Republic of Serbia
Republic Agency for Postal Services
Yes
Referred to their web site
No
Yes
Yes
No
Yes
No
All
Referred to their web site
Yes
No
Yes
Yes
Yes
Yes
Yes
No
No
Yes
Referred to their web site
Yes
Yes
No
No
Yes
Yes
All
All
Revenues/Employees
Referred to their web site
Referred to their web site
All
All
All
All
Referred to their web site
Referred to their web site
Draft Analysis of agencies in the Republic of Serbia — Page 112
ANNEX 3. LIST OF AGENCIES BY AREAS
Area
ENERGY
ENVIRONMENTAL
PROTECTION
AGRICULTURE
FORESTRY
WATER MANAGEMENT
CONSTRUCTION
URBAN AND SPATIAL
PLANNING
HEALTH
CULTURE
INFORMATION
DEFENSE
JUSTICE
PUBLIC
ADMINISTRATION
LEGISLATION
MINING
EDUCATION
SCIENCE
LABOR
SOCIAL POLICY
Agency
Energy Agency of the Republic of Serbia
Environmental Protection Agency
Agency for Ionizing Radiation and Nuclear Safety of the Republic of Serbia
Republic Hydrometeorological Service of Serbia
Veterinary Directory
Plant Protection Directorate
Directorate for National Reference Laboratories
Directorate for Agrarian Payments
Directorate for Agricultural Land
Administration of Forests
Directorate for Water
Republic Housing Agency
Seismological Survey of Serbia
Republic Geodetic Authority
Republic Agency for Spatial Planning
Biomedicine Administration
Medicines and Medical Devices Agency of Serbia
Agency for Accreditation of Health Care Institutions of Serbia
Office for Cooperation with Churches and Religious Communities
Office for Cooperation with the Media
Commissioner for Information of Public Importance and Personal Data
Protection
Statistical Office of the Republic of Serbia
Defense Inspectorate
Office of the Council on National Security and Classified Information
Protection
Security Information Agency
Military Security Agency
Military Intelligence Agency
Directorate for the Management of Seized Assets
Office of National Council for Cooperation with the International War
Crimes Tribunal
Prosecution Office for War Crimes
Public Attorney's Office of the Republic of Serbia
Commission for Implementation of the Program of Protection
State Prosecutors
Public Prosecution Office
Prosecution Office for Organized Crimes
High Judicial Council
Directorate for Enforcement for Prison Sanctions
Human Recourse Management Service
Administrative Inspectorate
Administration for Joint Services of the Republic Bodies
Office for Regulatory Reform and Regulatory Impact Assessment
Republic Secretariat for Legislation
Geology Institute of Serbia
National Council for Higher Education
Intellectual Property Office of the Republic of Serbia
Occupational Safety and Health Directorate
Labor Inspectorate
Republic Agency for Peaceful Settlement of Labor Dispute
Institute for Social Insurance
Central Registry of Mandatory Social Insurance
Draft Analysis of agencies in the Republic of Serbia — Page 113
REGIONAL
DEVELOPMENT AND
LOCAL SELFGOVERNMENT
TRANSPORT
FOREIGN AND
INTERNAL TRADE
TELECOMMUNICATIONS
INTERIOR
FINANCE
ECONOMY
HUMAN AND MINORITY
RIGHTS
FOREIGN AFFAIRS
National Agency for Regional Development
Office of Sustainable Development Undeveloped Areas
Coordination Body for the Municipalities of Presevo, Bujanovac and
Medvedja
Office for Kosovo and Metohija
Administration for the Transport of Dangerous Cargo
Authority for Determination of the Seaworthiness
Road Traffic Safety Agency
Ports Management Agency
Civil Aviation Directorate of the Republic of Serbia
Directorate for Inland Waterways
Directorate for Railways
Republican Directorate for Commodity Reserves
Digital Agenda Administration
Republic Broadcasting Agency
Republic Agency for Electronic Telecommunications
Republic Agency for Postal Services
Mine Action Centre
Commissariat for Refugees of the Republic of Serbia
Tax Administration
Customs Administrations
Treasury Administration
Public Debt Administration
Administration for the Preventing of Money Laundering
Commission for State Aid control
Fiscal Council
State Audit Institution
Office for the Revision of the EU Funds Management System
Social and Economic Council of the Republic of Serbia
Tobacco Administration
Free Economic Zones Administration
Directorate of Measures and Precious Metals
Bankruptcy Supervision Agency
Deposit Insurance Agency
Privatization Agency
Serbian Business Registers Agency
Serbia Investment and Export Promotion Agency
Agency for Restitution
Republic Directorate for Assets of the Republic of Serbia
Public Procurement Office
Republic Commission for the Protection of Rights in Public Procurement
Procedures
Anti-Corruption Council
Anti-Corruption Agency
Commission for Protection of Competition
Securities Commission
Office for Human and Minority Rights
Commissioner for Protection of Equality
Directorate of Gender Equality
Ombudsman
Commission for the Examination Responsibility for Violation of Human
Rights
EU Integration Office
Office of the Professional and Operational Tasks in Negotiating Process
Office for Cooperation with Diaspora and Serbs from the Region
Draft Analysis of agencies in the Republic of Serbia — Page 114
ANNEX 4. SURVEY RESULTS
Here we briefly present the results of the survey of agencies on their major revenue and
expenditure categories, and number of employees. Out of total number of agencies asked to
provide information of public importance (67), 23 agencies provided information on major
categories of revenues. On the basis the answers received, it could be concluded that agencies
that provided the information of public importance financed their functioning and activities
primarily using budgetary resources, followed by own-source resources, donations and surplus
of revenue over expenditures (that is, unspent resources from the previous years). Majority of
agencies use different categories of revenues simultaneously.
Graph 1.
With regard to the data on expenditures, around 17 agencies responded (out of 67 asked). On
the basis of the responses received, it could be concluded that agencies that provided the
information of public importance spend the most on employees, purchasing goods and services,
other operational expenditures, capital expenditures and subsidies.
Draft Analysis of agencies in the Republic of Serbia — Page 115
Graph 2.
With regard to the data on employees, 25 agencies (out of 67 asked) answered. On the basis of
data received, more than 65% of employees working in the agencies that provided the
information of public importance is employed on the basis of the contracts on temporary and
periodical work, special service contracts or additional work contracts with agencies (7455
employees in total).
Graph 3.
Draft Analysis of agencies in the Republic of Serbia — Page 116
Graph 4.
Draft Analysis of agencies in the Republic of Serbia — Page 117
ANNEX 5. AGENCIES IN SERBIA THAT HAD FORERUNNERS
Agencies that gained current status/organizational
form prior to 2000s
Republic Geodetic Authority
Seismological Survey of Serbia
Agencies that gained current status/organizational
form in 2000s
Tax Administration
Customs Administration
Treasury Administration
Directorate of Measures and Precious Metals
Administration for the Prevention of Money Laundering
Military Security Agency
Military Intelligence Agency
Digital Agenda Administration
Privatization Agency
Republic Agency for Spatial Planning
Serbia Investment and Export Promotion Agency
Agency for Ionizing Radiation and Nuclear Safety of the
Republic of Serbia
Geology Institute of Serbia
Mine Action Centre
Security Information Agency
Office for Kosovo and Metohija
Office for Cooperation with Diaspora and Serbs from the
Region
Office for Cooperation with Churches and Religious
Communities
Office for Human and Minority Rights
General Secretariat of Government
Republic Electorial Commission
Commission for Protection of Competition
Year when the agency gained its current
status
1992
1995
Year when the agency gained its current
status
2005
2005
2005
2007
2005
2003
2006
2011
2001
2003
2001
2009
2011
2004
2002
2012
2012
2012
2012
2005
2000
2005
Draft Analysis of agencies in the Republic of Serbia — Page 118
ANNEX 6. REGULATORY BODIES IN CHARGE OF IONIZING PROTECTION AND
NUCLEAR SAFETY IN THE EU COUNTRIES
Country
Czech
Republic
Estonia
Regulatory Bodies
State Office for Nuclear Safety
Organizational Structure/Characteristics
Governmental Body
Radiation Protection Centre
Germany
Ministry for the Environment,
Nature Conservation and
Nuclear Safety
And
Since 2009 in the course of reorganization, the Estonian
Radiation Protection Centre was merged with the
Environmental Board as a Radiation Safety Department
Directorate-General
Greece
Federal Office for Radiation
Protection
Greek Atomic Energy
Commission
Latvia
State Environmental Service
Radiation Safety Centre of
Latvia
Lithuania
State Nuclear Power Safety
Inspectorate
National Atomic Energy
Agency
The National Commission for
Nuclear Activities Control
And National Agency for
Radioactive Waste
Slovenian Nuclear Safety
Administration
And Slovenian Radiation
Protection Administration
Nuclear Regulatory Authority
of the Slovak Republic
Poland
Romania
Slovenia
Slovakia
UK
Bulgaria
Sweden
Office for Nuclear Regulation
Nuclear Regulatory Agency
Independent Higher Federal Authority
Independent decentralized Public Service supervised by
the General Secretariat for Research and Technology
under the Ministry of Education & Religious Affairs,
Culture & Sports
Since 2009 in the course of reorganization, the Radiation
Safety Centre of Latvia was merged whit State
Environmental Service as a State Environmental Service
Radiation Safety Centre of Latvia
Governmental Institution
Central Organ of Governmental Administration
Public institution of national interest (that has legal
personality and is subordinated to the Prime Minister)
Agency (firstly was established as a body within the
Ministry of the Environment)
Central Authority of State Administrative (that is a legal
person; as to the financial management rules of state
budgetary organization management are applied)
Agency of the Health and Safety Executive
Independent Specialized Body of the executive power. In
2002 the Committee on the Use of Atomic Energy for
Peaceful Purposes was transformed into the Nuclear
Regulatory Agency.
Authority under the Ministry of the Environment
Swedish Radiation Safety
Authority
Bosnia and
State Regulatory Agency for
Independent Administrative Organization
Herzegovina Radiation and Nuclear Safety
Croatia
State Bureau for Radiation and State Administration Body
Nuclear Safety
Macedonia
Directorate
for
Radiation Directorate within the state administration
Safety
Montenegro The Environmental Protection State Administrative Body
Agency And The Ministry of
Tourism and Environment
Source: ENSREG website (http://www.ensreg.eu/members-glance/national-regulators) and websites of
national regulators
Draft Analysis of agencies in the Republic of Serbia — Page 119
ANNEX 7. CROATIAN DEAGENCIFICATION - BODIES THAT WERE REORGANIZED
No.
Body
1
Fund for Regional Development
2
Fund for Development and
Employment
3
Regional Centre for Assistance
and Disaster Relief
Action
Abolition - Taken over by the Ministry for Regional
Development, Forestry and Water Management
Abolition - Taken over by the Ministry of Economy, Labor and
Entrepreneurship and Ministry for Regional Development,
Forestry and Water Management
Abolition - Taken over by the National Protection and Rescue
Directorate
4
Agency for Export and
Investment Promotion
Abolition - Taken over by the Ministry of Economy, Labor and
Entrepreneurship
5
Croatian Privatization Fund
Merger with the Central State Administrative Office for State
Property Management and Agency for Government Real Estate
6
7
8
9
Croatian Centre for Agriculture,
Food and Rural Affairs
Institute for Seeds and
Seedlings
Croatian National Institute of
Agricultural Extension
The State Stud Farm of
Lipizzans in Đakovo
Absorbed by the Institute for Seeds and Seedlings
Absorbed by the Croatian Centre for Agriculture, Food and
Rural Affairs
Absorbed by the Croatian Chamber of Agriculture
Absorbed by the Croatian Centre for Horse Breeding
10
Croatian Centre for Horse
Breeding - State Horse Lipik
Absorbed by the the State Stud Farm of Lipizzans in Đakovo
(taken over by the Croatian Centre for Horse Breeding - State
Horse Lipik)
11
Agency for Government Real
Estate
Merged with the Central State Administrative Office for State
Property Management and Croatian Privatization Fund
12
Croatia's anti-doping in sport
Abolished - Taken over by the Croatian Olympic Committee
13
Forestry Extension Service
Absorbed by the Croatian Forests LLO
14
Croatian Geodetic Institute
Absorbed by the State Geodetic Administration
Source: Government of Croatia (2010) Proposal for Reorganization of Agencies, Institutes, Funds and
Other Legal Persons with Public Authority, Ministry of Administration, Government of the Republic of
Croatia
Draft Analysis of agencies in the Republic of Serbia — Page 120
ANNEX 8. IRELAND DEAGENCIFICATION
Table 1. Bodies that should have been rationalized, amalgamated and abolished in 2012
No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Body
Further Education and Training Awards
(FETAC)
Higher Education and Training Award
Council (HETAC)
National Qualifications Authority of
Ireland (NQAI)
Vocational Education Committees
Merge Irish Research Council for
Science, Engineering and Technology
Irish
Research
Council
for the
Humanities and Social Science
Competition Authority
National Consumer Agency
Labour Court
Labour Relations Commission
National
Employment
Rights
Authority
Employment Appeals Tribunal
Equality Tribunal
Forfás
City and County Enterprise Boards (35)
Local Government Management Service
Board
Local Government Computer Services
Board
Limerick Northside Regeneration Agency
Limerick
Southside
Regeneration
Agency
An Comhairle Leabharlanna (Library
Council)
Comhar
(Sustainable
Development
Council)
Action
Amalgamation of FETAC, HETAC & NQAI
Reduce Number of VEC’s from 33 to 16
Merge Irish Research Council for Science, Engineering
and Technology & Irish Research Council for the
Humanities and Social Science into consolidated single
council under HEA
Merge Competition Authority & National Consumer
Agency Primary legislation required
Rationalize the industrial relation/employee rights
institutions - Labor Court, Labor Relations Commission,
Employment Appeals Tribunal, National Employment
Rights Authority, and Equality Tribunal into single agency
Establish the scope to merge Forfás into the Department
Review of City and County Enterprise Boards
Merge Local Government Management Service Board &
Local Government Computer Services Board into Local
Government Management Agency
Merge Limerick Northside and Limerick Southside
Regeneration Agency into Limerick Local Authorities
To be subsumed into an existing public body
To be integrated into the National Economic & Social
Council (NESC)
This agency incorporates the functions of the Affordable
Interim
Housing and Sustainable
22
Homes Partnership, National Building Agency and
Communities Agency
Centre for Housing Research
23 Dormant Accounts Board
Discontinue Dormant Accounts Board
Commission
on
Public
Service Merge Commission on Public Service Appointments with
24
Appointments (CPSA)
Ombudsman Office
Merge the National
Council for Professional
National Council for Professional
25
Development of Nursing and Midwifery into An Bord
Development of Nursing and Midwifery
Altranais
26 Opticians Board
Merge into Health and Social Care Professionals Council
27 National Cancer Registry Board
Merge National Cancer Registry Board into HSE
28 Equality Authority
Merge to form new Human Rights & Equality
29 Human Rights Commission
Commission
30 Irish Museum of Modern Art
Combine Irish Museum of Modern Art, Crawford Art
31 Crawford Art Gallery
Gallery and the National Gallery of Ireland, while
retaining separate identities
32 National Gallery of Ireland
33 National Archives
Merge National Archives and the Irish Manuscripts
Commission into the National Library while maintaining
34 Irish Manuscripts Commission
separate identities
21
Draft Analysis of agencies in the Republic of Serbia — Page 121
35
36
37
38
39
40
41
42
43
44
45
46
47
48
Merge functions of Language Commissioner with
An Coimisinéir Teanga / Language
Ombudsman Office. To be progressed in the context of
Commissioner
the ongoing review of the Official Languages Act 2003
National Library
Department to examine the issue of shared services &
the Board structure of both Bodies
National Museum
National Roads Authority
Merge NRA with Railway Procurement Agency
Irish Aviation Authority
Merge IAA with the Commission for Aviation Regulation
Commission for Aviation Regulation
Irish Sports Council
Legislation to be published in 2012 to enable the merger
National Sports Campus Development
of NSCDA with the Irish Sports Council in 2013
Authority
Review role of Shannon Development (Tourism) and
Shannon Development (Tourism)
possible merger of functions into Fáilte Ireland
Review role of DRTA and consider possible merger of
Dublin Regional Tourism Authority
functions into Fáilte Ireland
Civil Defence Board
Merge into Department
Merge the Digital Hub Development Authority with
Digital Hub Development Authority
Enterprise Ireland/IDA
Merge back-office functions of the Office of the
Ombudsman for Children
Ombudsman
for
Children
into
the
Ombudsman/Information Commissioner’s Office
Merge Family Support Agency into New Child & Family
Family Support Agency
support Agency by 2013 The Family Mediation Service
element has transferred into the Legal Aid Board
Table 2. Candidate bodies for critical review
Body
No.
1 National Milk Agency
2 Irish Maritime Development Office
3 Bord Iascaigh Mhara (B.I.M.)
Commission
for
Communication
4
Regulation
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Action
Abolish or merge with Bord Bia
Subsume into the Marine Institute
Transfer functions of BIM into the Department
Merge with the Broadcasting Authority of Ireland
Merge with the Commission for Communication
Regulation
Expert Group on Future Skills Needs
Absorb into Department
Review role of NE&WB in the context of the
National Education and Welfare Board
establishment of the new Child & Family Support
Agency
Advisory Council for Science, Technology Absorb into Department
and Innovation
National Competitiveness Council
Absorb into Department
Office of the Chief Scientific Adviser to Examine absorbing into Science Foundation Ireland
the Government
Review future role of Shannon Development in the
Shannon Development
context of the Mid West Taskforce Report
Environmental Protection Agency / Merge Environmental Protection Agency and the
Radiological Protection Institute of Ireland Radiological Protection Institute of Ireland
Local Authorities
On-going rationalization of Local Authorities structures
Merge in the Office of the Comptroller & Auditor
Local Government Audit Service
General
Building Regulations Advisory Body
Absorb into Department
Merge National Development Finance Agency in to
National Development Finance Agency
OPW/National Procurement Service
Merge the Valuation Office, the Property Registration
Valuation Office
Authority and Ordnance Survey
Disciplinary Code of Appeals Board and Abolish /Merge with new employment rights body
the Independent Mediator
State Laboratory
Merge Forensic Science Laboratory into State
Broadcasting Authority of Ireland
Draft Analysis of agencies in the Republic of Serbia — Page 122
20
21
22
23
24
25
26
27
28
29
30
to
32
33
Laboratory
Role should be reviewed as part of review of 2006
Development
Education
Advisory
White Paper on ODA included in Programme for
Committee
Government
Abolish / disband along with the other bodies in the
group (NESDO) having regard to the duplication of
NESC
functions with the ESRI and the economic advisory role
of the new Irish Fiscal Advisory Council
Mental Health Commission
Absorb into Patient Safety Authority
National Paediatric Hospital Development Dependent on outcome of decision on hospital
Board
The Programme for Government envisages the creation
Health Information and Quality Authority
of a Patient Safety Authority incorporating HIQA with a
licensing role
The Programme for Government states that a new
Hospital Care Purchase Agency will combine with the
National Treatment Purchase Fund
National Treatment Purchase Fund as part of the
transition to a universal health insurance model
Future to be considered in context of proposed move to
Health Insurance Authority
a system of Universal Health Care
Merge into Health and Social Care Professionals
Pre-Hospital Emergency Care Council
Council
Property Services Regulation Authority
Merge with the Private Residential Tenancy Board
Reception and Integration Agency, Office Rationalize various Refugee Structures
of
the
Refugee
Applications
Commissioner & Refugee Appeals
Tribunal
Merge the Valuation Office & Ordnance Survey Ireland
Property Registration Authority
into the Property Registration Authority
Office
of
the
Commissioner
Data
Protection Amalgamate with the Office of the Ombudsman
Reduce or merge Visiting Committees as there is now a
Prison Inspectorate
Subsume Commissioners of Charitable Donations and
Commissioners of Charitable Donations
35
Bequests into proposed Office of the Charities
and Bequests
Regulator
Merge with State Laboratory
36 Medical Bureau of Road Safety
Amalgamate as part of establishing a single transport
safety body comprising Road Safety Authority, Railway
37 Railway Safety Commission
Safety Commission, and the Maritime Safety
Directorate
38 Road Safety Authority
As above
Potential for shared service with other cultural
39 Chester Beatty Library
institutions
Placenames
Commission
/
An Absorb function within Department
40
Choimisiúin Logainmneacha
41 Heritage Council
Merge the functions of the Council into Department
42 Culture Ireland
Merge the functions of Culture Ireland into Department
Integrate regulatory functions with the Financial
43 Pensions Board
Regulator
44 Pensions Ombudsman
Merge with the Financial Services Ombudsman
Formal merge the Companies Registration Office and
45 Companies Registration Office
the Office of the Registrar of Friendly Societies
Office of the Registrar of Friendly As 45 above
46
Societies
Source: Government of Ireland (2011) Public Service Reform, Department of Public Expenditure and
Reform, Dublin
34 Prison Visiting Committees
Draft Analysis of agencies in the Republic of Serbia — Page 123
ANNEX 9. TESTS/CRITERIA FOR REVIEW PROCESS OF AGENCIES
Flowchart 1. shows how the process of deagencification should be conducted, i.e. how the
criteria for merging, absorption, replacement and abolition should be applied. It provides criteria
for the most appropriate way of providing functions/tasks/services currently performed by
agencies.
Draft Analysis of agencies in the Republic of Serbia — Page 124
Does specific function need to be performed? (Take EU requirements into the consideration)
YES
NO
REGULATORY FUNCTION
Political Impartiality Test
Passed
Does body perform other tasks?
EXECUTIVE FUNCTION
Yes
Political Impartiality Test
Not Passed
Ministry /
Special
Organization
Performance Test
Passed
Value for Money
Test - whether
efficiency could be
increased on the
basis of merging /
absorption?
Yes
Merger /
Absorption on the
basis of more
efficient option
Not Passed
No
Functional Overlapping Test
Abolition
Passed
Not Passed
Value for Money
Test - whether
efficiency could be
increased on the
basis of merging /
absorption?
Merger /
Absorption /
Replacement on
the basis of
most efficient
option
Passed
Not Passed
Yes
Functional
Overlapping Test
Functional
Overlapping
Test
Passed
Status quo
Passed
Not Passed
Not Passed
Performance Test
Merger /
Absorption
on the
basis of
more
efficient
option
Performance Test
Passed
Not Passed
Value for Money
Test - whether
efficiency could be
increased on the
basis of merging /
absorption?
Yes
Merger /
Absorption on the
basis of more
efficient option
Merger /
Absorption
on the basis
of more
efficient
option
Passed
Not Passed
No
Status quo
No
Draft Analysis of agencies in the Republic of Serbia — Page 126
No
Status quo
Further analysis
depends on the
importance of
those other
tasks.
ANNEX 10. TRANSITION GUIDELINE
This transition guideline was proposed by the Public Administration Select Committee (UK
House of Commons) for the purpose of reorganization of public bodies in the UK 128, setting out
factors that should be considered by business plans for reorganizing public bodies. It offers key
good practice principles for reorganization, and could be used by Serbian authorities when
reorganizing agencies in Serbia.
Rationale for
change
Accountability
and public
administration
impact
Options
appraisal
Identifying
and managing
costs
Identifying
and realizing
benefits
Managing the
change
Evaluation
and review
Be clear about why the change is being proposed, and in particular why existing
arrangements are not able to deal with the situation.
Be clear about what the change is designed to achieve, and set corresponding
objectives which can be tested at a future date.
Consult relevant parties about the change and its objectives, and incorporate
consultation feedback in change planning.
Clarify how the change affects the body’s accountability to the relevant department and
Ministers, to Parliament, and to the wider public.
Establish whether there are cogent reasons for the body to be independent from direct
ministerial control (that is, if there is a need for politically impartial decisions to be
made about the distribution of taxpayers' money).
Identify any wider public administration impacts, including those on the parent
department, other departments and public bodies, and local government.
Identify all feasible options, including no structural change and alternative delivery
models.
Ensure that the option is chosen according to appropriate and well evidenced criteria,
and that key assumptions underlying the different options are tested and varied.
Ensure that the preferred option can be supported on grounds of economy, efficiency
and effectiveness, and in particular on comparison of expected costs and benefits.
Ensure the costs of the change are estimated as accurately and completely as
possible.
Express costs in monetary terms as far as possible, and specify other non-monetary
costs in measurable terms.
Specify how long it is expected to take for costs to be recouped.
Put in place sound arrangements for recording and monitoring costs, and for bringing
costs back on track if they start to exceed those budgeted.
Ensure the expected benefits of the change are fully identified, and as far as possible
expressed in measurable and monetary terms.
Define the timeframe for realizing benefits, and the evidence needed to show that
benefits have materialized.
Put in place appropriate arrangements to monitor benefits, and to manage risks that
threaten those benefits being realized.
Ensure board-level support and clear leadership for change.
Ensure there are clear responsibilities for delivering the change, and that staff with
appropriate skills are appointed to the implementation team.
Ensure there is a detailed implementation plan covering risks, deadlines, budget and
impact on service levels.
Specify anticipated staff impacts and ensure changes are clearly communicated to
staff.
Ensure effective review arrangements are in place to evaluate the change shortly after
implementation, in order to identify and apply wider lessons.
If appropriate, define ongoing review arrangements to track whether the long-term
objectives of the change, such as improved accountability, are being achieved.
128
Adopted by the House of Commons, Public Administration Select Committee (2010) Smaller
Government: Shrinking the Quango, State Fifth Report of Session 2010–11
Draft Analysis of agencies in the Republic of Serbia — Page 128
ANNEX 11. LIKELY CONSEQUENCES AND COSTS OF REORGANIZATION
Likely negative consequences and costs that could be expected from reorganization:
1. Direct costs: Staff costs (salary uplifts where agencies with different pay scales merge,
recruitment costs, temporary staff costs, possible redundancy costs, relocation costs,
training costs), property/accommodation costs (capital acquisitions/refurbishments,
removal costs), service contracts – new/exits, information technology costs (capital IT
additions, IT consultancy costs, service contracts – new/exits/transition costs),
communication and branding costs (signage and other branding, website development,
stakeholder communication, public awareness/advertising), corporate costs (human
resources and finance support, professional fees, other consultancy costs), potential
severance pays for civil servants that were long-term employed in previous agency but
are not allocated jobs in new agency for the specific period of time;
2. Indirect costs: Productivity losses where change is disruptive or when staff morale and
motivation for working in falls; consequently, lower quality of work, losses of expertise
and institutional memory; adverse effects on third parties, such as reduced customer or
stakeholder satisfaction, decreased responsiveness to customers, or increased burdens
on businesses and other organizations;
3. Time-consuming reform, since there is a set of laws that should be changed /
amended / abolished;
4. Resistance of agencies, coming from wage reduction and/or reduction of a number of
employees.
Likely positive consequences and benefits that could be expected from reorganization:
1. Direct financial savings: Public procurements (goods, contracted services, specialized
services, etc.), estate and other asset rationalization (especially cost rationalization in
terms of renting and purchasing or building new premises, whereas state property and
government premises will be used more efficiently for operations of various agencies),
subsidies, improved operational efficiency, ability to cease lower priority functions or
activities, economies in back office functions (for example, through shared services),
elimination of irrational high expenses by government bodies, potential savings form
decreasing number of employees in the public sectors, and savings from wages;
2. Improved policy focus and delivery: Increased effectiveness of policy or service
delivery, a more coordinated/‘joined-up’ policy approach, improved capacity to meet
policy objectives, greater clarity about core priorities and organizational targets, for
regulatory bodies - improved regulatory outcomes (for example, clarity and certainty of
regulatory approach);
3. Better management and governance: Clearer governance and management
structures, improved financial management, improved accountability, ability to devolve
functions to most appropriate level, higher staff welfare and satisfaction, greater
transparency about organizational functions, activities, financing and salaries;
4. Beneficial third party effects: Increased responsiveness to customers/service users or
external parties, higher customer/service user satisfaction, reduced burdens on
business, other organizations and individuals.
Draft Analysis of agencies in the Republic of Serbia — Page 129
ANNEX 12. ESTIMATION OF THE COSTS OF NEW BODY ESTABLISHMENT
New Public Body
Table 1: Total Estimated Costs for the first year of operation of public body
Costs
Estimated start-up costs in €
Software costs (see table 2.)
Hardware - server, computers, printers etc (see table 2.)
Office furnishings and upgrade - goods
Software maintenance (annual)
Annual Staffing costs (see table 3.)
Annual running costs - utilities, office supplies etc. (see table 4)
Renting costs (see table 4)
Public Campaign (see table 5)
Estimated total first year costs
Table 2: Estimates of Start-up Costs for the Public Body (€)
Quantity
€ per unit
Total €
Software costs
Laptops
Desktops
Printers (black and white)
Multifunctional machine (printer, copier, fax)
Copying machine
Servers and Infrastructure
Total
Table 3. Annual staffing costs (€)
Per
Per
No
Totals
Salaries
month
year
Director
Staff
Total
Table 4. Annual Running Costs for the Public Body (€)
Annual running costs
No
Per month
Per year Total annual costs
Utilities
Office supplies
Phone/Mail/Internet
Renting costs
Miscellaneous
Total
Table 5. Initial budget for a public campaign (€)
Price
No
Total
Design (logo, brochure)
Web site (design & hosting)
Brochures (A4, 4 colors)
Press conferences
Advertisements in the 3 most popular Dailies
TV and radio broadcast
Provisionally
Total
Draft Analysis of agencies in the Republic of Serbia — Page 130
ANNEX 13. CALCULATING DIRECT SAVINGS THAT ARE GOING TO BE MADE ON THE
BASIS OF REORGANIZATION OF EXISTING AGENCIES
In the case of mergers, absorption, replacement and/or abolition of existing agencies in Serbia,
cost-benefit analysis of every proposal for reorganization must include calculation of direct
savings that are going to be made (proposed in the table below).
Direct Savings
Survival and Death Events concerning Existing
Agencies
Agency that Agency that Agency that
Agency that
is being
is being
is being
is being
merged
absorbed
replaced
abolished
Savings related to Managers
and other Employees
Property/Accommodation
Savings
Running Operations Savings
Public Procurement Savings
Corporate or Back Office
Functions Savings
Outsourcing
Communication and Branding
Savings
Total
Draft Analysis of agencies in the Republic of Serbia — Page 131
ANNEX 14. CONTACTED PARTIES
1. Siniša Simić, Ministry of Energy, Development and Environmental Protection of the
Republic of Serbia
2. Vladimir Međak, European Integration Office of the Republic of Serbia
3. Anamaria Musa, Department of administrative science, Faculty of Law, University of
Zagreb
4. Aleksandar Penev, Fiscal Statistics Division, Treasury, Ministry of Finance and Economy
of the Republic of Serbia
5. Mira Prokopijević, Office for Regulatory Reform and Regulatory Impact Assessment
Draft Analysis of agencies in the Republic of Serbia — Page 132
ANNEX 15. ROAD MAP
RECOMMENDATION
ACTIONS
I.
SET UP A TEMPORARY
GOVERNMENTAL BODY
TO CONDUCT AND
COORDINATE REFORM
OF AGENCIES
USE SPECIFIC AND
CLEARLY DEFINED
CRITERIA TO REVIEW THE
EXISTING AGENCIES'
LANDSCAPE
AMEND OR ABOLISH THE
LAW ON PUBLIC
SERVICES
RESPONSIBLE BODIES
TIMEFRAME FOR
IMPLEMENTATION
DEALING WITH THE STOCK - HOW TO RATIONALIZE AND REORGANIZE THE EXISTING SYSTEM OF AGENCIES
Set up the Specialist Management Reform Unit (SMRU) as a temporary
Governmental body;
Government of Serbia
Engage legal and financial professionals and public management reform
specialists;
SMRU
Establish effective communication and cooperation with ministries and agencies;
SMRU and General
Secretariat
Prepare a guidelines for the ministries and agencies on how to communicate
with the SMRU and how the tests/criteria for organizational changes will be
applied by the SMRU;
SMRU and General
Secretariat
Produce a register of all agencies at the national level, including all relevant
information such as year of establishment of agency, number of employees,
sources of funding, figures on revenues and expenditures, etc.;
SMRU
Conduct the review of the existing agencies using well-defined criteria and make
recommendations on appropriate organizational changes (including mergers,
abolitions, replacements, etc.);
SMRU
Prepare an appropriate cost-benefit analysis for each recommendation;
SMRU
Publish recommendations on possible rationalization of agencies on the website
and launch public discussion;
SMRU and General
Secretariat
Announce recommendations for reorganization to the Parliament and discuss
them with the members of the Parliament and representatives of the
Government.
SMRU
Policy option 1:
- Improve and modernize the Law on Public Services, linking it to the Law on
Public Agencies and Law on Public Administration.
Ministry of Justice and Public
Administration and SMRU
Policy option 2:
Draft Analysis of agencies in the Republic of Serbia — Page 133
SHORT TERM
(4-6 MONTHS)
LONG TERM
(1-3 YEARS)
LONG TERM
(1-3 YEARS)
MEDIUM TERM
(9-12 MONTHS)
- Abolish the Law on Public Services and Law on Public Agencies introducing
comprehensive law regulating public services.

Delete the article 28 (3) of the Law on Public Administration that allows bodies
within ministries to be legally independent if prescribed by the special law.
Ministry of Justice and Public
Administration
SHORT TERM
(4-6 MONTHS)
CHANGE THE STATUS OF
SOME SPECIAL
ORGANIZATIONS INTO
THE BODIES WITHIN
MINISTRIES
Conduct an in-depth analysis of which special organizations do not perform
regulatory activities and/or some professional tasks that entail specific
knowledge and skills, but rather conduct administrative and/or executive tasks;
SMRU
SHORT TERM
(4-6 MONTHS)
Change the status of special organizations into the bodies within ministries
where possible, through changing existing legislation that prescribed
establishment of these special organizations, or adopting completely new law
that would change status of special organizations, where appropriate.
Relevant ministries / Ministry
of Justice and Public
Administration
Amend article 50 of the Law on Public Administration to enable stricter control
over special organizations.
Ministry of Justice and Public
Administration
SHORT TERM
(4-6 MONTHS)
Change the Law on Public Agencies and prescribe that public agency may be
established just by law.
Ministry of Justice and Public
Administration
SHORT TERM
(4-6 MONTHS)
Conduct an in-depth analysis of which public agencies perform tasks of same
nature as tasks of special organizations, and where principle of impartiality is not
of crucial importance for the level of independency;
SMRU
SHORT TERM
(4-6 MONTHS)
Change the status of public agencies into the special organizations where
possible, through changing existing legislation that prescribed establishment of
these public agencies, or adopting completely new law that would change status
of all public agencies, where appropriate.
Relevant ministries / Ministry
of Justice and Public
Administration
Amend the article 34 (1) of the Law on Public Administration in such a way that it
is not allowed to establish special organizations with different names but
secretariat / bureau.
Ministry of Justice and Public
Administration
Introduce appropriate names, ensuring correlation between
Relevant ministries / Ministry
ABOLISH THE
INDEPENDENCE OF
BODIES WITHIN
MINISTRIES

STRENGTHEN SCRUTINY
OVER SPECIAL
ORGANIZATIONS
Policy option 1:
All special organizations are supervised by competent ministries.
Policy option 2:
All special organizations are supervised by the Government.
ENSURE THAT PUBLIC 
AGENCIES ARE
ESTABLISHED BY LAW 
CHANGE THE STATUS OF
SOME PUBLIC AGENCIES
INTO THE SPECIAL
ORGANIZATIONS
USE APPROPRIATE
NAMES TO REFLECT
ORGANIZATIONAL
FORMS OF AGENCIES



them
and
Draft Analysis of agencies in the Republic of Serbia — Page 134
SHORT TERM
(4-6 MONTHS)
organizational forms of agencies, through changing the existing legislation that
prescribed establishment of agencies, or adopting completely new law that
would change names of all agencies, where appropriate.
of Justice and Public
Administration
Produce a register of all other public bodies with delegated public powers and
publish it on the SMRU's website;
SMRU and Government
Conduct an in-depth analysis on the tasks that could be transferred to other
public bodies;
SMRU
Assess the extent to which it is possible to delegate public powers to private
entities;
SMRU
Create an appropriate mechanism for scrutiny of private entities that would be
holders of delegated public authority.
SMRU
OBLIGE MINISTRIES TO
PUBLISH LISTS OF ALL
BODIES UNDER THEIR
AUSPICES
Oblige all existing ministries to publish on their websites lists of the bodies that
are under their aegis;
Government
Publish a list of independent regulatory and all other bodies under the auspices
of the Parliament on the Parliament’s website.
National Parliament
ABOLISH AGENCIES
THAT ARE NOT
OPERATIONAL IN
PRACTICE
Abolish as soon as possible:
- Agencies that have never been operational in practice (e.g. virtual
agencies).
Relevant ministries / Ministry
of Justice and Public
Administration, Government
and National Parliament

CAREFULLY EXAMINE
WHICH TASKS COULD BE
TRANSFERED TO OTHER
PUBLIC BODIES SUCH AS

ASSOCIATIONS,
CHAMBERS, ALLIANCES,
FUNDS AND
FOUNDATIONS
LONG TERM
(1-3 YEARS)
SHORT TERM
(4-6 MONTHS)
SHORT TERM
(4-6 MONTHS)
II.
DEALING WITH THE FLOW - MECHANISMS FOR PREVENTION OF ADMINISTRATIVE STRUCTURE FROM FURTHER AGENCY PROLIFERATION
INTRODUCE A CONTROL
Adopt a regulation or amend the Governmental Rules of Procedure to include a General Secretariat,
MEDIUM TERM
MECHANISM FOR
detailed financial plan, assessment of sustainability and impact assessment on Republic Secretariat for
(9-12 MONTHS)
ESTABLISHING NEW
businesses and citizens (to be a part of the general regulatory impact Legislation, SEIO and Office
AGENCIES AND OTHER
assessment statement) of a new agency or other public body that is proposed by for Regulatory Reform and
PUBLIC BODIES
new legislation, as well as an identification and explanation of the EU Regulatory Impact
regulation/requests;
Assessment

Issue approval (on financial consequences of a proposal on the budgetary Ministry of Finance and
resources), opinion on a substantial need for establishment of a new body, and Economy, SMRU (General
opinion on whether establishment of a new agency would result in unnecessary Secretariat), and Office for
costs and administrative procedures for businesses and citizens, whenever Regulatory Reform and
establishment of new agency or other public body is proposed by state Regulatory Impact
Assessment
administration authorities;
Draft Analysis of agencies in the Republic of Serbia — Page 135
INTRODUCE REGULAR
REVIEWS OF EXISTING
AGENCIES TO
DETERMINE POSSIBLE
REORGANIZATION
MEASURES

Review all existing laws prescribing establishment of new agencies that have not
become operational yet and propose adequate measures;
SMRU


Adopt a regulation or amend the Rules of Procedure of the Government that:
- Obliges the SMRU / the General Secretariat / ministries to conduct reviews of
agencies periodically;
- Prescribes the exact period of time when the reviews should be carried out,
- Describes the path of conducting reviews, and
- Includes the criteria that agencies will be evaluated against.
General Secretariat of the
Government and Republic
Secretariat for Legislation
Prepare a clear guidance to help the General Secretariat manage regular
reviews of agencies;
SMRU







INTRODUCE 'SUNSET
CLAUSES', ESPECIALLY
FOR TEMPORARY AND 
AD HOC PUBLIC BODIES 




INTRODUCE
PERFORMANCE
MANAGEMENT
INDICATORS IN
AGENCIES
Oblige agencies to provide all information relevant for conducting regular
reviews to the SMRU / the General Secretariat / ministries twice a year.
Introduce 'sunset clauses' into the pieces of legislation specifying establishment
of new public agencies and other (temporary and ad hoc) public bodies;
Review:
- all existing laws that prescribe establishment of new public agencies and other
(temporary and ad hoc) public bodies that have not become operational yet;
- all law proposals adopted by the Government that have not been subject to the
parliamentary discussion yet, and
- all draft laws that are being made at the moment and envisaging establishment
of new public agencies and other (temporary and ad hoc) public bodies, in order
to find out if it is useful / possible to introduce the institution of 'sunset clauses'.
Government or General
Secretariat
Government, General
Secretariat, and Ministries



SHORT TERM
(4-6 MONTHS)
SMRU
III.
DEALING WITH THE QUALITY OF AGENCIES' PERFORMANCE AND SERVICE DELIVERY
Make clear expectations of ministries / the Government / the National Parliament Ministries, Government, and
in terms of objectives, performance, rewards, sanctions for different levels of
National Parliament with the
overspending, and means to measure output and performance against them;
help of the Ministry of
Finance and Economy

LONG TERM
(1-3 YEARS)
Perform several pilot projects introducing performance indicators in chosen
agencies;
Ministry of Finance and
Economy
Gradually introduce an appropriate set of performance indicators in all agencies;
Ministry of Finance and
Economy
Make results transparent by publicizing on agencies’ websites, in mandatory
Agencies / Ministry of
Draft Analysis of agencies in the Republic of Serbia — Page 136
LONG TERM
(1-3 YEARS)
annual reports, and in the Law on the Budget for each year once the entire
budget turns into programmatic budget.
Finance and Economy
STRENGTHEN FINANCIAL
CONTROL OF AGENCIES


Adopt the list of users of public resources, including public agencies, and publish
it on the website of the ministry in charge of finance and economy;
Ministry of Finance and
Economy
Ensure a mechanism to force all the agencies to open accounts with the
Treasury;
Ministry of Finance and
Economy

Adopt the law that provides general framework for fees and taxes charged by
agencies as soon as possible.
Ministry of Finance and
Economy
ABOLISH MANAGEMENT
BOARDS OF PUBLIC
AGENCIES
Simplify the governance structures in public agencies, including the abolition of
management boards through amending the Law on Public Agencies (articles 1320 and 30-32).
Ministry of Justice and Public
Administration
MAKE A REFORM OF
EMPLOYMENT
CONDITIONS AND
SALARIES IN AGENCIES
Policy option 1:
Arrange that all employees that perform administrative tasks and make decisions
in the administrative procedure in agencies are employed and paid as civil
servants, and alternatively exempt experts and professionals performing strictly
professional tasks;

Arrange that level of experts' salaries is a subject of approval by the Government
or ministry in charge of finance.
Policy option 2:
Arrange that all people working in agencies are employed as civil servants, and
alternatively, prescribe some exemptions by changing and amending the Law on
Civil Servants and Appointees and the Law on Salaries of Civil Servants and
Appointees, on the basis of well-established criteria.

Ministry of Finance and
Economy
Ministry of Finance and
Economy
Ministry of Finance and
Economy
Introduce the system of grade levels (12-15) regulated by the Law on Salaries of
Civil Servants and Appointees, which would, in a systematic and consistent way,
deal with the issue of the level of salaries for similar positions in different state
administration authorities and agencies;
Ministry of Finance and
Economy
Organize and conduct all planned and necessary public job competitions in
bodies within ministries, special organizations and Governmental services,
employing people as civil servants, according to their internal organizational
structure and classification of work posts.
Ministries, Bodies within
ministries, Special
organizations, Governmental
services, Governmental
Human Resource
Management Service
Draft Analysis of agencies in the Republic of Serbia — Page 137
SHORT TERM
(4-6 MONTHS)
SHORT TERM
(4-6 MONTHS)
MEDIUM TERM
(9-12 MONTHS)

ENSURE FULL
IMPLEMENTATION OF
THE LABOR LAW IN THE
PUBLIC SECTOR
Oblige all holders of original and delegated public powers, and organizations for
mandatory social contribution, to publish exact numbers of their employees and
salaries on their websites;
Ministry of Finance and
Economy
Introduce a unified register of employees in the public sector and of their
salaries, and publish it on the website of the ministry in charge of finance and
economy;
Ministry of Finance and
Economy
Enforce all agencies to report to the Government on the implementation of the
Law on Maximum Number of Employees in the Administration of the Republic of
Serbia;
Ministry of Finance and
Economy
Start immediate implementation of the Law on Maximum Number of Employees
in the Administration of the Republic of Serbia including following actions;
Ministry of Finance and
Economy

Amend the Law on Maximum Number of Employees in the
Administration of the Republic of Serbia, prescribing the exact deadline
for adopting the regulation on the way of reporting of agencies to the
Government, deadlines, register's content and other related issues;

Introduce reporting system in accordance with the Law on Establishing
Maximum Level of Salaries in the Public Sector, to be used by public
agencies, organizations regulated as public agencies, and
organizations for mandatory social contribution (to report to the ministry
in charge of finance on the number of employees, their positions and
salaries paid at the end of the month).
Provide thorough inspection of the implementation of the Labor Law in the public
sector;
Ministry of Justice and Public
Administration
Strengthen the role of the State Audit Institution in auditing employment in
agencies;
State Audit Institution and
National Parliament
Strengthen the role of internal audit in agencies.
Agencies
NARROW THE
REQUIREMENTS ON
SPECIFIC EXPERIENCE
FOR MANAGERIAL
POSITIONS IN AGENCIES
Narrow the requirements on specific professional experience that managers of
agencies need to have - incorporate them into the relevant Laws - Law on Public
Administration (articles 30-31 and 35-37), the Law on Civil Servants and
Appointees (articles 33-34, 69), the Law on Public Agencies (article 22).
Ministry of Justice and Public
Administration
SHORT TERM
(4-6 MONTHS)
ENABLE EXTENSIVE
SHARING OF BACK
Strengthen control over all back-office functions/services (i. e. public
procurements, catering, accounting, using vehicles, cleaning, IT and IT
Ministry of Finance and
Economy, Public
MEDIUM TERM
(9-12 MONTHS)


Draft Analysis of agencies in the Republic of Serbia — Page 138
MEDIUM TERM
(6-9 MONTHS)
OFFICE FUNCTIONS
equipment maintenance, renting) and enable extensive sharing of these
functions/services.
Procurement Office, and
Administration for Joint
Services of the Republic
Bodies
INTRODUCE

POSTGRADUATE
COURSE ON PUBLIC
ADMINISTRATION/PUBLIC
POLICY INTO THE

UNIVERSITY

CURRICULUM
Change existing curricula and introduce a suitable postgraduate (at least MSc or
MA) course in Public Administration and/or Public Policy;
Ministry of Education,
Science and Technological
Development and Serbian
universities
Organize it at one or several public faculties (e.g. in charge of economics, law
and political and social sciences) in cooperation with eligible private universities.
Ministry of Education,
Science and Technological
Development and Serbian
universities
Draft Analysis of agencies in the Republic of Serbia — Page 139
LONG TERM
(1-3 YEARS)
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